Amendment Agreement
(PA)

Summary

This amendment agreement can be used for amending or modifying commercial contracts of any type governed by Pennsylvania law. This template includes practical guidance, drafting notes, and alternate clauses. This amendment agreement should be read alongside the agreement that will be amended. The provisions should provide exact instructions on how the underlying agreement is to be altered (i.e., addressing definitions, punctuation, language, further changes that flow from the amendments (such as numbering), etc.) pursuant to this amendment agreement. Counsel should consider how each change will affect the remainder of the underlying agreement, and make such further changes accordingly so that the document retains its consistency and accurateness. For example, if a limited warranty is added by way of amendment, the agreement's "cumulative remedies" provision should be deleted, as it contradicts this addition. In addition, the attorney drafting the amendment should use best efforts to add new sections (or subsections) in a manner that least disrupts the underlying agreement. For example, if an additional section (or subsection) can easily and logically be added to the end of the agreement (or subsection), instead of in the middle, then that is how it should be done. This concept applies to all changes to keep the amendment as simple and clean as possible. Commercial contracts routinely incorporate an amendment clause addressing how the parties may amend the agreement. Most of these clauses require amendments (and waivers) to be made in writing and signed either (1) by all of the parties to the agreement, or (2) by "the party to be charged" (i.e., the party against whom the modification is to be enforced). These provisions are often referred to as "no oral amendments" clauses, and sometimes require the executed writing to be specifically identified as an amendment to the underlying contract. However, parties to an agreement commonly amend or waive certain terms throughout the course of their relationship without preparing and executing the requisite amendment. In such instances, Pennsylvania courts regularly uphold such oral amendments based upon the parties' actions and words. For example, the court in Accu-Weather v. Prospect Communications, 435 Pa. Super. 93, 644 A.2d 1251 (1994) stated as follows: "An agreement that prohibits non-written modification may be modified by subsequent oral agreement if the parties' conduct clearly shows the intent to waive the requirement that the amendment be made in writing." Similarly, the court in Universal Builders, Inc. v. Moon Motor Lodge, Inc., 430 Pa. 550, 244 A.2d 10 (1968) stated as follows: "A written contract which is not for the sale of goods may be modified orally, even when the written contract provides that modifications may only be made in writing." Such intended modifications, however, must be proven by clear and convincing evidence. See Pellegrene v. Luther, 403 Pa. 212, 169 A.2d 298 (1961). Pennsylvania courts, however, do not generally uphold oral amendments or waivers with sales of goods contracts, which are governed by the Uniform Commercial Code (UCC). Specifically, 13 Pa. C.S.A § 2209 gives full effect to no oral amendment clauses, and as such, does not typically enforce oral amendments. Similarly, when the statute of frauds (which requires a record sufficient to indicate that a contract has been made) applies pursuant to 13 Pa. C.S.A § 2201, oral amendments are generally not enforced (13 Pa. C.S.A § 2209(c)). In any event, best practices would include preparing the written amendments required pursuant to the underlying agreement. If the parties to an agreement have a tremendous number of changes to their agreement, instead of creating and executing an amendment such as this one, they can create an entirely new agreement, incorporating all of the parties' desired terms, and refer to it as the "Amended and Restated Agreement." Such a document would necessarily include language stating that the prior agreement is "hereby terminated and shall be of no further force or effect." Sometimes, in lieu of amending an agreement, a party is simply looking to obtain a one-time waiver or consent from the other party. This is an appropriate course of action when the other party will not agree to permanently amend a provision of the underlying agreement but agrees to grant a one-time waiver for a particular event or instance of non-performance. For amendment clauses, see Amendment Clause (PA). For general information regarding contract drafting, see Commercial Contract Drafting and Review.