Contract, in the simplest definition, is a promise enforceable by law. Making a contract requires the mutual consent of two or more persons, one of them ordinarily making an offer and another accepting. Most people need entry into contracts or agreements when buying or selling properties, businesses or other higher-value assets. Once all parties have signed the contract, it becomes a legal binding agreement.

 

Can I add name(s) to the contract after it has been signed?

 

Recently, People often ask about can they add or change names to the contract after it has been signed? Sometimes people entered into a contract and are unsure about whether they can add their partner, family members, another corporation name or remove themselves from the existing contract. The answer is YES, and followed by a strict process.

 

Let us imagine if such a situation happens that the buyer A entered into a contract with the seller to purchase real estate, and the buyer A’s family member B would like to add his/her name to the contract afterwards. Under this situation, there is a valid contract already exists and binding each party through signed by the buyer A and the seller. It is treated as a new transaction by adding party B’s name on the existing contract other than by mere words of mouth.

 

After acquiring consent from the contractual parties, the buyer  A will not need to perform the former contract under its terms and conditions. At this time, a deed of rescission is necessarily required.

 

What is Deed of Rescission? 

So, what is the Deed of Rescission? A Deed of Rescission is a document that forms the new terms and conditions based on the rescission clause by amending the specific term of the previous contract. In another words, the buyer can rescind the clause of the original contract and re-enter into a new agreement with the correct new agreed terms, includes adding names.

 

What is the process of rescission contract?

The seller and the buyer would need to agree with the requests subject to a deed of rescission and combined it to the end of the original contract. Parties are now obliged to the terms and conditions of the deed of rescission. The deed of rescission will not take effect until all parties have fully signed.

 

How does this apply to you?

An additional legal cost will incur when the executed contract involves an amendment. Generally, the party who requested the change is responsible for covering the extra cost for both parties.

 

Acquiring consent from the other party

It is necessary to obtain the consent from the other party when applying the deed of rescission and different choices will cause various legal consequences. The seller will generally accept a general name change request, such as adding  family member’s name(s) or transferring the title of the contract to the other family member. However, the buyer would need an explanation to the other party in regards to the transaction is not for any commercial purpose. In Australia, the collection of stamp duty is rigorous. After signing the contract, the request for a reduction or change of names is likely to be deemed as avoiding tax. Therefore, making a decision carefully before signing the contract is essential to prevent this kind of situation.

 

So, if you would like to amend your contract which has already been signed by both parties. Do not panic, this issue can be solved.

 

In MORRISON SPECTER, we have a professional team of lawyers to provide you the best legal advice and strive for the maximum benefits.