Amendment Basics
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An amendment clause (also called a "modification clause") establishes the rules for changing the NDA after it's signed. It specifies what's required for a change to be valid and binding.
A typical amendment clause says:
- Amendments must be in writing
- Amendments must be signed by both parties
- Oral agreements don't modify the NDA
- Sometimes: Amendments must reference the original agreement
Why this matters:
- Prevents misunderstandings: Without clear rules, parties might disagree about what was actually changed
- Creates evidence: Written amendments create a paper trail
- Protects against unauthorized changes: Prevents lower-level employees from making binding modifications
- Supports enforceability: Courts can clearly see what terms apply
Without an amendment clause: General contract law would apply, which may allow oral modifications in some jurisdictions. This creates uncertainty that both parties should want to avoid.
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If your NDA requires written amendments: Yes, writing is required for a valid amendment.
Standard clause language:
"This Agreement may not be amended, modified, or supplemented except by a written instrument signed by authorized representatives of both parties."
What "in writing" means:
- Traditional paper documents with wet signatures
- Electronic signatures (DocuSign, Adobe Sign, etc.) usually qualify
- Email may qualify in some jurisdictions if it contains essential terms and clear intent
- Text messages are risky - courts are split on whether they satisfy "writing" requirements
Can an oral agreement override a "writing required" clause?
This is a complex legal question with different answers in different jurisdictions:
- Traditional view: No - the written requirement is self-enforcing
- Modern trend: Maybe - if parties clearly intended an oral modification and acted on it (course of performance)
- UCC context: Written requirements can be waived by conduct
Best practice: Always put amendments in writing, even if you think an oral agreement might be enforceable. Why create risk?
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It depends on your NDA's language and your jurisdiction, but email amendments are risky.
When email might work:
- Your NDA says "written instrument" without requiring formal signatures
- Both parties clearly express agreement in the email exchange
- Your jurisdiction recognizes emails as "writings" for contract purposes
- The email is from someone with authority to bind the organization
When email probably won't work:
- Your NDA says "signed by authorized representatives" - emails lack signatures
- Your NDA requires amendments to be executed "in the same manner as this Agreement"
- The email exchange is ambiguous about what's actually agreed
- The person emailing doesn't have signing authority
Risks of email amendments:
- Disputes about which email in a chain is "the" agreement
- Unclear whether proposals were actually accepted
- Questions about authority of the person sending the email
- Difficulty proving the email wasn't altered
Better approach: Use email to negotiate, then document the agreed changes in a formal written amendment signed by both parties. Electronic signature platforms make this easy and fast.
Authority and Approval
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Only people with actual authority to bind your organization should sign amendments.
People who typically have authority:
- Officers: CEO, CFO, General Counsel, COO
- Delegated signatories: People given formal signing authority by the board or officers
- Those who signed the original NDA: Usually have implied authority for amendments
People who typically do NOT have authority:
- Project managers and team leads (unless specifically delegated)
- Sales representatives
- Individual contributors
- Outside consultants
What if the wrong person signs?
- The amendment may be voidable (the company can disavow it)
- But if the company acts as though the amendment is valid, it may become binding through ratification
- The other party might claim "apparent authority" if they reasonably believed the signer could bind the company
Best practices:
- Maintain a clear signing authority policy
- Verify the other party's signer has authority
- Request a certificate of authority for significant amendments
- Match signer level to amendment significance
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Yes, and for significant amendments you should.
Ways to verify authority:
- Check title: Officers (CEO, CFO, etc.) typically have inherent authority
- Request a certificate: A secretary's certificate confirming the signer's authority
- Check public filings: SEC filings list officers; state records show authorized agents
- Review organizational documents: Bylaws may specify who can sign contracts
- Ask for board/committee approval: For major amendments, request proof of approval
When to be more careful:
- The signer's title doesn't clearly indicate signing authority
- The amendment is materially changing important terms
- The other company is large with complex approval requirements
- You've never dealt with this person before
- The amendment seems one-sided or unusual
When informal verification is OK:
- Minor administrative amendments
- Same person who signed the original NDA
- Clear officer title (CEO, General Counsel)
- You have an established relationship with the company
If you discover the signer lacked authority after signing: Raise the issue promptly. The amendment might be voidable, or the company might ratify it. Don't rely on an amendment without resolving authority questions.
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You can establish a tiered approval system, either in the original NDA or through a separate delegation.
Example tiered approach:
- Administrative changes: Project managers can approve (e.g., updating contact info, changing notice addresses)
- Minor modifications: Department heads can approve (e.g., extending term, adding representatives)
- Material changes: Officers only (e.g., expanding scope, changing confidentiality periods)
How to implement:
- In the NDA: "Amendments regarding [X] may be approved by the project lead identified in Exhibit A"
- Separate delegation: Written authority letter specifying what the person can approve
- Power of Attorney: Formal legal document for broader authority
Benefits:
- Faster approval for routine changes
- Reduces burden on senior executives
- Keeps decision-making at appropriate levels
Risks to manage:
- Clear boundaries on what's "administrative" vs. "material"
- Training for delegated approvers
- Documentation of delegations
- Regular review to ensure delegations remain appropriate
Common Amendment Scenarios
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Create a simple written amendment before the NDA expires.
Sample term extension amendment:
"This Amendment to the Non-Disclosure Agreement dated [Original Date] between [Party A] and [Party B] is entered into as of [Amendment Date]. The parties agree to extend the Term of the Agreement from [Current End Date] to [New End Date]. All other terms and conditions of the Agreement remain unchanged and in full force and effect. [Signature blocks]"
Timing considerations:
- Before expiration: Ideal - clearly extends the existing agreement
- After expiration: More problematic - you may need to reinstate the agreement and address the gap period
If the NDA already expired:
- Consider whether survival provisions still protect confidential information
- You might need a new NDA rather than an amendment
- Address whether the extension is retroactive to cover the gap
Automatic renewal clauses: Some NDAs include automatic renewal provisions ("This Agreement shall automatically renew for successive one-year periods unless..."). Check if your NDA has this before drafting an amendment.
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Memorialize the verbal agreement in writing as soon as possible.
Steps to formalize a verbal agreement:
- Document immediately: Send an email summarizing what was agreed, asking the other party to confirm
- Prepare a formal amendment: Draft a proper amendment document reflecting the agreed change
- Execute promptly: Get both parties to sign before memories fade or positions change
- Address effective date: Decide if the change is retroactive to when you verbally agreed or effective when signed
What to include in the amendment:
- Reference to the original NDA (date, parties)
- Clear statement of what's being changed
- Effective date of the change
- Confirmation that other terms remain unchanged
- Authorized signatures
Why formalization matters:
- Your NDA likely requires written amendments
- Verbal agreements are hard to prove
- Memories differ about what was actually agreed
- Personnel changes may make the verbal agreement impossible to verify later
What if the other party won't sign? If they agreed verbally but won't formalize it, you have a problem. Their refusal might indicate they didn't really agree, or they've changed their mind. You may need to continue under the original terms.
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Sometimes, but it's often simpler to use a joinder agreement or sign a new NDA.
Options for adding parties:
1. Amendment adding a party:
- All existing parties plus the new party sign the amendment
- The new party agrees to be bound by all NDA terms
- May require modifying terms that assume two-party structure
2. Joinder agreement:
- A separate document where the new party agrees to join the existing NDA
- Existing parties acknowledge and consent to the joinder
- Common for multi-party arrangements
3. Separate NDA:
- The new party signs a fresh NDA with one or more existing parties
- Simplest approach if the new party has a different relationship
- Avoids complicating the existing agreement
Considerations when adding parties:
- Does the new party need access to all existing confidential information?
- Should the new party have the same rights and obligations as original parties?
- How do indemnification and liability provisions apply to the new party?
- Do governing law and venue choices still make sense?
Recommendation: Unless the original NDA was designed for multiple parties, a separate NDA with the new party is usually cleaner.
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This is a common amendment scenario - you need to clearly define what's added or removed from scope.
Expanding scope (adding more information types):
- Specify exactly what new categories of information are covered
- Clarify whether new information has the same protections as original scope
- Consider whether any special handling is needed (higher standard of care, different marking)
Sample expansion language:
"The definition of Confidential Information is hereby amended to include [new category]. Such information shall be subject to all protections of the Agreement, including [specific provisions]."
Narrowing scope (removing information types):
- Be explicit about what's no longer confidential
- Address information already disclosed under the old scope
- Consider whether return/destruction applies to carved-out information
Changing the purpose:
If you're changing scope because the business purpose changed (e.g., from evaluating a partnership to evaluating an acquisition), consider amending the Purpose clause as well. The two are interconnected.
Best practice: When significantly changing scope, attach a revised definition as an exhibit rather than trying to describe changes inline. This makes it clear what the current scope is.
Amendment Mechanics
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These terms are often used interchangeably, but there are nuances.
Amendment:
- Changes existing terms of the agreement
- Modifies, deletes, or replaces language
- Most formal approach
- Example: Changing the survival period from 3 years to 5 years
Addendum:
- Adds new terms without changing existing ones
- Supplements the original agreement
- Example: Adding a new category of confidential information
Side Letter:
- Informal agreement on specific points
- Often addresses practical implementation rather than legal terms
- May or may not be binding depending on language
- Example: Clarifying how destruction certificates will be handled
Practical advice:
- For any change to legal terms, use "Amendment"
- Use "Addendum" if you're truly only adding, not changing
- Avoid "Side Letter" for important changes - it sounds non-binding
- What matters most is clear, precise language - not the title
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A complete amendment should include these elements:
1. Title and reference:
- "Amendment No. 1 to Non-Disclosure Agreement"
- Reference the original agreement date
- Identify all parties
2. Recitals (background):
- Brief description of the original agreement
- Reason for the amendment (optional but helpful)
- "WHEREAS, the parties wish to amend certain terms..."
3. The actual changes:
- Identify each section being changed by number/title
- Quote the language being deleted or replaced
- State the new language clearly
- Use "deleted in its entirety," "replaced with," "amended to add"
4. Effective date:
- When does the amendment take effect?
- Is it retroactive to a prior date?
5. Confirmation of remaining terms:
- "Except as expressly modified hereby, the Agreement remains in full force and effect"
- "In the event of conflict, this Amendment shall control"
6. Signature blocks:
- Authorized representatives of all parties
- Printed names and titles
- Date of signature
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Good amendment tracking prevents confusion and disputes.
Basic tracking approach:
- Number amendments sequentially (Amendment No. 1, Amendment No. 2, etc.)
- Keep all amendments with the original NDA
- Maintain a summary sheet showing key terms as currently amended
- Store originals or certified copies securely
For heavily amended agreements:
- Create an "Amended and Restated" version that incorporates all changes into a single clean document
- This becomes the new controlling document
- Reduces confusion about which version of each clause applies
Amendment tracking table:
Consider maintaining a simple table:
- Amendment number and date
- Sections modified
- Brief description of change
- Effective date
Common mistakes:
- Not numbering amendments (leads to "which one came first?" disputes)
- Failing to reference the original agreement clearly
- Inconsistent defined terms across amendments
- Losing track of amendments when personnel change
Best practice: If you have more than 2-3 amendments, consider creating an amended and restated NDA that consolidates everything.
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Yes, in most cases electronic signatures are valid for NDA amendments.
Legal framework:
- E-SIGN Act (US federal): Electronic signatures are generally valid
- UETA (most US states): State-level validation of e-signatures
- eIDAS (EU): Recognizes electronic signatures across Europe
What e-signature platforms provide:
- Identity verification of signers
- Audit trail showing when and how documents were signed
- Tamper-evident seals on completed documents
- Secure storage of executed documents
When to use wet signatures instead:
- If the original NDA was executed with wet signatures and requires the same for amendments
- If the counterparty's country doesn't recognize e-signatures
- If the amendment involves particularly sensitive changes
- If your organization's policy requires wet signatures above a certain dollar value
Best practices for e-signatures:
- Use a reputable platform (DocuSign, Adobe Sign, HelloSign)
- Include clear signing instructions
- Verify signers' email addresses
- Download and retain copies of fully executed documents