Change in Agreement – Contract Tip of the Week

Q: My client made a change in our agreement without notifying me. How can I address this?

A:   It is in your best interest—and arguably in the best interests of both parties to the agreement—to include terms in your contract that require either party to notify the other prior to making any changes. This may sound straightforward, but changes without notification occur somewhat frequently. An example might be the addition of a new consultant, or perhaps the assignment of the contract to a new entity. Without this notification requirement, you may subject your firm to unpredictable circumstances. For instance, you may be expected to provide additional services without compensation, or to change the terms of payment. A typical notice provision provides the name and contact information for the party to whom notification of any changes must be sent in order for those changes to be valid. For greater protection, consider including mutual rights to suspend or terminate the agreement in case the notifications are unacceptable to the recipient.

The Risk Specialty Group and RLI Design Professionals are pleased to feature our Contract Tip of the Week series. Each week, we’ll review a question submitted by a design firm relating to the subject of contracts. Keep in mind, though, that these discussions are general in nature and in making specific business decisions, it’s important to review your options with a knowledgeable attorney.