When you enter into an agreement with a party, you typically develop terms and conditions to protect both parties. However, circumstances may change, and you may need to update the agreement.
Here are some instances that may require updating the agreement:
When the law changes
When laws that affect your business change, you will need to update your contract. For example, when the minimum wage changes or when laws governing your business structure’s operation change. Since laws keep changing, it’s crucial to review your contracts regularly to avoid missing anything.
When you make internal changes
If you make an internal change, you should review your contracts to ensure they are in accordance with it. For example, when you change your privacy policies, exit procedures for a partner, how a shareholder can transfer their shares, a supplier’s payment terms and so on. Your contracting partner should be well-informed about what constitutes a breach of contract every time.
Further, if you change an employee’s work location or duties, you should update their contract.
When you have vague language in a contract
Chances are you did your best to have clear contracts. However, your contracting partners may still find a clause or term confusing. If you keep encountering issues due to a particular language in your agreement, you may need to review it.
When you want to renew an agreement
If you lease your business property or equipment, you should review your contracts before renewing them. You can update the contract wording to deal with any issues you have encountered.
A poorly worded contract can lead to misunderstandings. Seek legal guidance to ensure yours are clear for all to understand.