When someone asks whether it is "legal" for a company to unilaterally change the terms of a contract after it has been executed, usually, what they are really wanting to know is whether the terms of the amended contract are enforceable or not.
The answer to that question almost always comes down to the elements required for a contract to be validly formed. But, on the dozens of paths and rabbit trails that eventually lead to that one deciding factor, there are many nuances to look for and consider. In this article, we will discuss some of those nuances in the context of two real-world examples.
What is (versus what is not) included in the agreement?
When two parties find themselves in a dispute arising from an executed agreement, it would be nice if no part of the dispute pertained to which documents had actually been part of the agreement at the time of the agreement's execution. In this idealized scenario, the dispute's action could thus focus on things like what facts underlying the dispute are, what the agreement says the respective parties' rights and obligations are given those facts, etc.
But, in reality, there are two common scenarios that force parties to a contract dispute to first argue about what the agreement consisted of:
- When one party--usually the sole author of the agreement--unilaterally makes a change to the agreement's terms after the two parties had executed that agreement.
- When one party--again, usually the sole author of the agreement--claims that the agreement consisted of "incorporated" documents that the other party may have never even seen.
Of these two scenarios, the first is far more common. So, that's the scenario we'll look at first.
(But we'll talk about both scenarios in this article nonetheless, just so that you're more fully equipped to deal with this kind of issue after you finish reading this article.)