ALTERATION OF INSTRUMENTS
A change in the meaning or language of a legal document, such as a contract, deed, lease, or COMMERCIAL PAPER, that is made by one party to the document without the consent of the other after it has been signed or completed.
If such a change is made by a third party without the consent of either party to the instrument, it is called a spoliation or mutilation.
Method
The face of an instrument is changed by its
alteration. A difference in handwriting, a change
in words or figures, an erasure, and the striking
out of particular words are some methods used
to alter an instrument. Since there must be a
change in the meaning or language of a document,
retracing an original writing—as when a
figure written in pencil is retraced in ink—is not
an alteration.
Material Changes
The alteration of an instrument materially
changes it. The document no longer reflects the
terms that the parties originally intended to serve as the basis of their legal obligation to each
other. To be material, the change must affect an
important part of the instrument and the rights
of the parties to it. Any material alteration
relieves the nonconsenting party of any obligation
to perform according to the terms of the
instrument. If the altered instrument is a contract,
then the original contract is void. The
nonconsenting party cannot be legally obligated
by the new contract since he or she never agreed
to it. A document that has been materially
altered does not regain its original validity if it is
restored to its original form by erasing or deleting
unauthorized words.
The date of an instrument is often considered
a material provision when it establishes the
time within which the parties to a document
must perform their obligations under it. An
unauthorized change of date that shortens the
time of payment or extends the time of performance
so that more interest will become due
is a material alteration.
An alteration of a signature that changes the
legal effect of an instrument is material. Erasing
words that show that the signer is acting as an
agent, for example, changes the signer’s liability
under the instrument and, therefore, is a material
alteration. However, when a signature that
was improperly placed on a document is erased,
there is no material alteration since the legal
meaning of the document is not changed.
Any change in the terms of the instrument
that affects the obligations of the parties is material.
In a contract to sell land on commission, a
change in the rate of commission is material. A
change in a description in a deed so that it transfers
a smaller piece of land, a change in the name
of a purchaser in a sales contract, or an alteration
in the terms of financing set forth in a
mortgage is also material.
Time of Alteration
A modification in a document before its
completion is not an alteration. The parties are
bound to review the document and to have
agreed upon its terms before executing it. In
order for an alteration to nullify the legal effect
of an instrument, the change must be made after
its completion.
Intention
A material change must be intentionally
made. The motive behind the alteration is
unimportant. If a mistake or accident causes a
change, this is not considered a material alteration,
but the document may be reformed or
rescinded.
The Person Making the Change
The change to the instrument must be made
by a party or someone authorized by him or her
to do so. No change made by a third person
without the consent of either party to the document
will invalidate it if its original terms can be
learned.When a material alteration is made by a
party to commercial paper, such as a check or
promissory note, the paper will be enforced as
originally written against the party who made
the changes.
Consensual Alteration
A change in an instrument made with the
consent of the parties is binding upon them.
Such consensual alteration is usually evidenced
by the signing by each party of his or her initials
and the date that the agreement to the changes
to the instrument was reached.
