Amendment to the Contract: Everything You Need to Know
An amendment to the contract is written documentation that terms within an existing contract have changed.3 min read
2. Contract Amendment Basics
3. When Should I Use a Contract Addendum?
4. What Should a Contract Addendum Include?
5. How to Use the Contract Amendment
An amendment to the contract is written documentation that terms within an existing contract have changed.
What Is a Contract Addendum?
The document to use when you need to make at least one change to an existing agreement or contract is an addendum. By using an addendum, you can alter the terms without invalidating the contract. An addendum is added to the end of the contract as a separate document.
Other names for a contract addendum include:
- Contract amendment
- Amendment to the contract
- Contract modification
- Amending agreement
Contract Amendment Basics
Anytime you make a change to a contract or agreement, it's always a good idea to maintain documentation of the alteration. With a contract amendment, you can change certain terms or provisions of a contract without invalidating or revoking the full agreement. It's a time-saver because you don't have to start over with drafting a new contract. You can also avoid confusion in the future, which often occurs when people are using contracts that are out-of-date.
When you add an amendment to a contract, this will not replace the entire agreement. Instead, it only replaces the section(s) outlined and described in the amendment. If a contract only requires a few changes, the process of creating an amendment is much simpler than drafting and signing a new contract.
When Should I Use a Contract Addendum?
Anytime you need to make even a minor change to an agreement or contract, you should use a contract addendum. You need to use an addendum if a certain condition or term of the contract isn't working as it should be and requires a change, such as removing or adding a clause or changing a date.
Other reasons to use a contract addendum might include:
- Making a major change to a job description within an employment contract, which should be signed by the employee and employer
- Allowing a tenant in a rental agreement to perform maintenance around the property, something that was previously not outlined in the original rental agreement
- Adjusting a due date for work being provided by an independent contractor
Anytime you want to change at least one of the provisions found in an agreement or contract that has been signed by all involved parties and is currently in effect, you should use an addendum. Amendments can also be used to outline deletions, additions, and revisions to any terms and conditions in a contract that has been fully executed.
If a contract requires major changes that have an impact on the point and overall structure of the contract, it might make sense to create a new document. If a contract's main terms will change drastically, it would be better to draft and execute a new contract. An example of this would be changing the location of a rental property in a rental agreement. Instead of trying to create multiple amendments for a location change, including the amount of the security deposit, physical address, and rental terms, creating a new document would probably take less time.
What Should a Contract Addendum Include?
When drafting an addendum to a contract, make sure to note and include these important details:
- Include the names of the parties involved in the original agreement
- Have all the involved parties sign the addendum
- Maintain the same font size, typeface, and margins that were used in the original contract to show that all involved parties made the change deliberately
An amendment to a contract should also outline:
- The effective date
- Titles of any individuals or companies that are representing any involved parties
- The name of the original agreement or contract
- The section of the contract that is being removed, added to, or changed, including specific subsections, if applicable
- The nature of the amendment, such as addition, deletion, or edit
Make sure to include any names and number of subsections from the original contract, if applicable, and be as specific as possible.
How to Use the Contract Amendment
After completing the contract amendment, all involved parties should sign it. These signatures must be witnessed by an independent person who is not involved in the agreement. The two parties signing the amendment cannot serve as witnesses for one another's signatures, since they are both involved. An independent witness must be at least 18 years of age.
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