The changes to the contract are known as…?

XYZ Ltd and Engineer Corp signed a long-term supply contract in which both parties had agreed on performance targets. Recently, due to increased customer demands, XYZ Ltd realises that they should make changes to the contract with Engineer Corp with regards to performance management. These changes are approved and signed by both the buyer and seller.

The changes to the contract are known as…?
A . An amendment to the prime contract
B. A stand-alone subcontract to the prime contract
C. An appendix to the prime contract
D. A separate counter-offer to the supplier

View Answer

Answer: A

Explanation:

The changes are made to the prime contract. They are also signed and approved by both parties. These changes are known as amendment (variation) to the contract. A contract amendment allows the parties to make a mutually agreed-upon change to an existing contract. An amendment can add to an existing contract, delete from it, or change parts of it. The original contract remains in place, only with some terms altered by way of the amendment.

Reference:

– Modify an Existing Contract with a Contract Amendment

– CIPS study guide page 26-28

LO 1, AC 1.1