Contract addendum vs. amendment: differences and definitions.
Learn the basic definitions of these legal-contract terms and discover the differences in how they function within contracts.
Contract addendums and contract amendments sound similar — in some ways, they can deliver similar results. It’s important to recognize, however, that these two contract-law terms are unique and have incredibly different functions.
Ready to learn about contract addendums versus amendments? Keep reading to discover the definition of each term and how they function differently within contracts.
What are contract addendums and contract amendments?
A contract addendum is a post-contract attachment that modifies, alters, or totally changes some of the terms of a previously established contract. Typically, this adds something new to a preexisting document. Once all parties named in a contract agree to an addendum, it becomes a part of the new contract.
A contract amendment, on the other hand, is a document that makes changes to an existing contract designed to correct it, better it, or ensure something in the original document gets clarified. In other words, an amendment alters the original terms and conditions of a contract by replacing a specific portion of that agreement.
Contract addendums vs. amendments: when to use each process.
These two distinct contract processes function as follows:
- An amendment is typically used to change something that’s part of an original contract. Think of amendments as modifications to the earliest agreement (for example, altering an agreed-upon deadline).
- Contract amendments are commonly seen in service industries if a client wants the scope of a project to be changed or further clarified.
- An addendum is used to clarify and add things that were not initially part of the original contract or agreement. Think of addendums as additions to the original agreement (for example, adding a deadline where none existed in the original version).
- In order for a contract addendum to be legally enforceable, all contracts must be properly executed with intent — indicating that all parties involved are fully aware of the new scope and are actively agreeing to it.
Can you add an amendment to an addendum?
A contract amendment can be made on a pre-existing contract addendum, although it may be more efficient to amend the scope of the original contract if it is possible and agreeable with all parties involved.
The process of amending a contract addendum can be simple, and mimics the process of submitting an amendment to a regular contract. General recommendations include:
- Keeping everything in writing. You’ll want to make the amendment crystal clear, outlining the exact elements of scope on the addendum that are changing. You will want to reference the title of the original contract to keep everyone visually aware of the scope change in full.
- Ensuring intent at every stage. For any type of contract or amendment to be legally enforceable, intent must be present. Work to document this wherever possible to supplement your process.
- Walking away with fresh, new signatures. Every time you amend an agreement of any type, it’s important to get the signatures of all parties involved. This can prevent legal complications down the line.
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