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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10227
Experience:  I have been practising for 30 years.
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If you are in an existing contract and the other party seeks

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If you are in an existing contract and the other party seeks to vary the terms, how does this work in terms of offer and acceptance?
Could you explain your situation in a little more detail please?
Customer: replied 1 year ago.
We have an IT support contract with a company, which is 13 months into a 36 month contract. They have asked us to reduce our fees and I plan to offer them reduced fees in consideration for recommencing the contract, allowing for a new start date, i.e. starting a new three year contract, at a reduced rate. However, I am not sure of the position, if I were to make them a new offer would they be able to say no and consider that the existing contract had been terminated by our new offer?
An offer is open to acceptance at any time until it is withdrawn. If the acceptance is not unqualified but is made with caveat or conditions, then the acceptance is not treated as an acceptance but as a counteroffer which is then subject to acceptance by the original party.You can vary the terms of any contract whether verbal or written, provided both parties agree. It is always as well to have it documented in writing. That way, it provides certainty.You can make an offer of a new contract which is subject to them signing a new deal for 3 years and they can choose to accept or not.If you make them a new offer, you would be making the new offer conditional upon them signing a three-year contract. They would then have two contracts, the original one and the new want and there needs to be an agreement at the same time for them to get out of the old one. That get out is conditional upon them signing a new contract.It is just important that the new offer to reduce the price is said to be conditional upon them signing a new three-year contract to replace the old one. If you do that and make it conditional, they cannot apply the new price to the old contract. It is just a case of getting the wording of your offer right.If you made in the new offer and then you change your mind, you can withdraw it at any time until it has been accepted.Can I clarify anything for you?Please do not forget to rate the service positive it is an important part of the process so that experts get credit.Best wishes.FES
Customer: replied 1 year ago.
So effectively, if I make them a new offer, conditional upon them signing a new 3 year deal, at a new rate, they can either accept it, which would then cancel the existing contract or refuse it, which would effectively leave us in the existing contractual position. If they seek to vary the offer then they are, in effect, refusing it.
That is right. If they want to vary the offer and they say that they will accept it subject to various things, they are in effect refusing it as it is and making a counteroffer to you which you would then need to accept. Their offer needs to be unconditional before it binds them or you.
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