retrospective change to a contract

[chma]

Hi - I hope someone can give me some advice on this.

A business that we supply is trying to enforce changes to our contract together, and is looking to backdate this to include business that we have already supplied over the last few months.

More specifically, we introduce business to this company, and they pay us a % of the money that they get from this business. They are now looking to deduct a fixed amount from each introduction that we have made, and apply this to all outstanding monies that they owe us over approximately the last 3 months. We obviously don't want to agree to this, but they are adamant that this is the rule that they are applying.

I am sure that this can't be done, and that any contractual change must be agreed by both parties?

 

[IANL]

Welcome chma

Not a lawyer, But if the contract is in writing then how can they change unless there is a clause allowing them to vary it!

if your not happy you just hold them to the contract. They will look at any way they can wriggle out and it may damage future relations. You have to take a view on the relationship.

Ask them why you should agree to the change. Would they accept the change f the boot was on the other foot.

Ian

 

[ilclifford72]

When you refer to a contract, is this a written contract signed by authorised signatories of both companies?

(Typically an Authorised Signatory would need to be a Director although in larger companies there are ways to delegate this responsibility)

Most contracts include clauses to cover variations in terms, that they need to be agreed in writing by all parties. Even if agreed, any changes from a contractual point of view can only be forward looking (to comply with accounting practices).

Finally, at the end of the day you need to decide the importance of the commercial relationship to your Company?

You can always enforce a properly written contract, but if that does greater damage to your business (in losing the relationship), then you need to think carefully about whether to reach a compromise or agree to their changes.

I find that in these situations it is useful to discuss with the counterparty as to why they feel the changes are necessary. If they are open and honest and can give a rationale for the change, maybe it is wise to listen?

I hope this helps....