Can I add extra terms to a contract that has already exchanged?
26 June 2008
This article was first published in Caterer
& Hotelkeeper on 12 June 2008.
Contracts often fail to address all relevant
matters. This might be because the parties never thought
about a situation that has now arisen or because the parties took
the view that an answer was so obvious they did not need to make
provision in the contract to cover the position.
The contracting parties are usually free to
amend contracts as many times as they wish or to tear up the first
attempt and start over again. As a practical matter, too many
variations should be avoided as this may lead to the contract
becoming unintelligible.
If the contract involves “land”, e.g. taking a new
lease, then a distinction is drawn between deliberate (e.g. the
parties decided to exchange one contract now for speed and to add
extra items later when time permitted) and accidental
omissions. A deliberate omission can render the entire
contract void and so it is safest to sign a brand new set of
documents with the missing terms added and formally terminate the
old documents.
If the omission was accidental and the other party
will not agree an amendment you may be able to persuade the courts
to correct an obvious drafting error in the contract (e.g. a
transposition of names) or to clarify certain terms. Where
there has been some degree of fault by one party (e.g. the party
knew of the error and encouraged the other party’s mistaken
belief), the courts may be prepared to insert substantial new
provisions.
For further information, please contact
Gary Pickard.