Inserting Random Phrases Identifying The Parties' Right To Amend The Contract

Why You Should Avoid Random Amendment Phrases in Contracts

I'm talking about phrases like “that the parties may agree to change from time to time” or "unless otherwise agreed."

I see these phrases appear randomly after stating an obligation or referencing other documents. 

I'm not a fan of this drafting approach. 

The language stating the parties can change a contract is not necessary. The parties to a contract are always free to amend anything and everything. They do not need the contract to give that permission.

Some people view this practice as innocuous. They say, “It can’t hurt. Why not include it if the parties have that right anyway?” Or they argue that we need to signal to the parties that they can make a change to the obligation.

How Ambiguous Amendment Language Creates Legal Risk

I understand the thinking, but I still don't think they are a good idea. Here's why:

1. They clutter up the contract

These extra phrases add unnecessary words, creating longer sentences, which may leave the other parts of the sentence unclear. If the sentence has two or more clauses, this phrase may leave readers guessing whether the right to amend applies to all the clauses or just the last one.

2. They create ambiguity about whether the parties must negotiate the changes

Under U.S. law, parties to a contract are subject to a duty of good faith and fair dealing. This "parties may negotiate" language creates the argument that the parties agreed to act in good faith to negotiate changes. After all, why else would it be in the contract?

If that's not your intention, then adding this language may create ambiguity about the parties' intent.

If you want to add a good faith obligation to negotiate something, then say that directly and precisely. Don't dance around the idea with this phrase.