Contract Variation Letter and Agreement

A way to record an agreed change to an existing commercial contract so that it is binding and clear. Part 1 is a variation letter that one party sends and the other countersigns – ideal for simple, low-value changes. Part 2 is a formal variation agreement with a table of amendments and an option to sign as a deed, for significant changes or where only one party benefits from the change.

• Changing the price, term, scope, specification or service levels of a commercial contract
• Adding or removing services, sites or products
• Extending a contract that is about to expire

• Check the original contract’s variation clause – it may require changes to be in writing, signed by both parties, or by named people (“no oral modification” clauses are enforceable)
• Identify the contract precisely: its title, date and parties
• Write out each change as exact replacement wording in the table, so there is no doubt what the contract now says
• Decide whether consideration is present (see the guidance note at clause 4 of Part 2) – if not, sign as a deed
• Make sure every party to the original contract signs, and keep the variation with the original contract