What is a contract rider vs. an addendum?
Explore the similarities and differences between a contract rider and an addendum, learn which to use, and how to get them signed electronically.
Contract riders and addenda are similar documents most often used in real estate, insurance, or law making — however, there are slight yet important differences between them that determine how and when they should be used.
What is a contract rider versus an addendum? Delve into their distinctions, when to apply each, and how to get electronic signatures for your important contracts.
What is a rider in a contract?
A rider is a document that addresses additional details, conditions, or terms of a contract. For example, in real estate, an attorney may draft a contract rider to supplement a standard purchase and sale agreement. In this case, the rider may outline details such as:
- Where and how a down payment is held
- The date the property will be vacated by the seller
- Property inspections the seller must pay for
Buyers and sellers may negotiate contract rider terms, and both parties sign the document.
What are different contract rider types?
Contract riders provide flexibility and customization to contracts, addressing unique and different needs. The specific types can vary depending on the contract and the industry it belongs to. Here are six common types of contract riders:
- Contingency rider — sets conditions like financing or inspections that must be met for a real estate contract’s validity
- Inspection rider — outlines property inspection processes and responsibilities in real estate contracts
- Financial rider — specifies financial terms, such as interest rates or payment schedules, in financial contracts
- Entertainment rider — pertains to performer contracts, detailing technical requirements and hospitality requests
- Amendment rider — allows changes to existing contracts when both parties agree
- Tenant rider — adds tenant-specific terms like pet policies or parking rules to lease agreements
What is a contract addendum?
Like riders, contract addendum are also an addition to a standard contract. An addendum can be used to change, add to, or update the information found in the original contract. They’re usually dated and signed and refer back to specific parts of the contract.
The differences between a contract rider vs. an addendum.
It’s important to understand the differences between contract riders versus addenda if you’re dealing with contracts. These two terms can often be used interchangeably, but they serve different purposes in updating and expanding on the terms of a contract. And when exploring the differences, it’s essential to also understand how they relate to a contract addendum versus an amendment, as they all play unique roles in modifying the terms and conditions of a contract.
Here are some of the main differences between the two:
- Purpose. Riders modify or detail existing contract terms, while addenda introduce entirely new terms or provisions.
- Incorporation. Riders become an integral part of the original contracts, while addenda are separate documents attached to them.
- Contents. Riders focus on adjustments or expansions of existing terms, while addenda bring forth new and distinct terms.
- Visibility. Riders are typically embedded within the main contract, whereas addenda are visibly separate attachments.
- Labels. Riders are usually labeled discreetly, whereas addenda are often numbered or have distinctive titles.
- Signing requirements. Riders are typically signed concurrently with the main contract by the same parties, whereas addenda may have separate signature lines and involve additional signatories.
Can an addendum vs. rider be used interchangeably?
In some cases, contract riders and addenda may be used interchangeably but it’s recommended that you discuss with your attorney which one might be best to use. Consulting with a legal professional makes sure that your contract changes are not only in line with your intentions but also legally sound to protect your interests when faced with the “addendum versus rider” decision.
Make your contract rider workflow easy.
If you’re making frequent changes to a contract, it’s important to keep track of each update. With Adobe Acrobat, attorneys, buyers, sellers, and other professionals can easily create contracts that are ready to share and legally sign.
Get more from your digital experiences — explore everything you can do with contract signatures today.
