Addendum to the Contract: Everything You Need to Know
Addendum to the contract, also called contract amendment or an amending agreement, is any document added after the signing of the agreement to modify its terms.3 min read
If you've entered into a legal contract, an addendum to the contract is any document added after the signing of the agreement to modify its terms while leaving the rest of the contract intact. This can also be called a contract amendment or an amending agreement; however, an amendment is generally not made with a separate document.
Elements of a Contract Addendum
An addendum to the contract defines the definitions, sections, clauses, and terms that need modifying and all parties must agree to and sign off on them. The language of an addendum is sometimes tricky since the law requires all parties to a contract to abide by its original language. For this reason, you must make sure not to create unintended consequences or loopholes with the addendum.
Contract addendums are typically used when:
- A date adjustment is necessary
- A specific term or condition isn't working out for either party
- A clause requires adding or removing
- A job description in an employment contract requires a change
- A deadline extension is necessary
- Terms of an apartment lease have changed
Larger changes, such as those that impact the contract's focus and structure, require an entirely new agreement. For example, you'd need a new contract if you were moving into a different property managed by the same company.
Consider having an attorney review any contract addendums, particularly for agreements that involve large sums of money or last for longer than a few months.
Consents and Waivers
When adding specific terms or conditions while maintaining the original contract validity, you need to create an addendum. However, making some types of changes don't require an addendum. These include cases in which a party has agreed to waive a contract breach by the other party. This is known as a consent or waiver, which means that the parties agree to continue with a contract despite a minor term being neglected.
Writing a Contract Addendum
When writing your addendum, follow these guidelines:
- Use the same font, margins, and style used in the original contract.
- Reference the original contract by name and date, with a title that makes it clear that this new document is an addendum.
- Name the parties to the contract.
- Indicate the addendum's effective date, using the same date format used in the original contract.
- Indicate the elements of the original contract that the addendum intends to change. Concisely but clearly describe the desired changes. You can clarify meanings by using italic and bold font as well as strikethrough.
- Note the date that you are adding the addendum.
- Add a concluding paragraph to ensure the addendum cannot be altered.
- Add a signature block with spaces for both parties to sign and the typed or printed names of each, along with titles.
- Add a notary block.
- Number the amendments if the contract changes more than once.
Laws Governing Contract Addendums
Addendums are not enforceable unless they comply with the existing contract terms. Many contracts provide specific circumstances under which terms are modifiable. Review the original contract and look for terms that prohibit addendums, allow one party to change the contract without the other party's consent, or otherwise provide requirements for addendums.
Make sure that the addendum complies with applicable laws, which are usually found at the state level. The Uniform Commercial Code (UCC) governs purchase contracts and does not require that a contract addendum include consideration. However, they do require the mutual assent of all parties.
Making Sure an Addendum Is Enforceable
A contract addendum cannot be legally enforced unless both parties fully understand the new terms and agree to them in writing. All parties who signed the original contract must also sign the addendum; if one or more parties is unavailable, they can appoint agents who have authority to sign on their behalf.
You'll also need to exchange another asset or promise to ensure the addendum has consideration and thus constitutes a valid contract. Consult an attorney if you're not sure whether consideration is a requirement since this depends on both state and contract law.
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