Addendum Vs Amendments To A Contract

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Emilene LucasLegal Assessment Team Supervisor
Updated on 17th May 2024

As we all know, contracts are an important part of business because they ensure everyone knows what to expect and what’s expected of them.

Legally binding agreements and contracts between businesses and individuals minimise the risk of misunderstandings and disagreements. What’s more, if someone doesn’t make good on their promise, they can be enforced to bring about the appropriate consequences. 

But sometimes, after you’ve made a deal or signed a contract, things need to change. That’s where addendums and amendments come in. They’re the tools that help you modify or update a contract without starting again. 

But what’s the actual difference between addendums and amendments to a contract? It’s not just a case of semantics. In this article, we’ll look at the definition of both and when they are commonly used to modify a contract, as well as share top tips to help you avoid key mistakes when modifying contracts.

What is an addendum to a contract?

An addendum is an additional document or attachment added to a contract to modify, clarify, or supplement its terms of conditions. 

Addendums are used when parties want to make additions to a contract after it’s signed.

When are addendums commonly used to change a contract? 

Addendums are commonly used to add something to a contract like additional services, products, obligations, terms, or clauses.

What should an addendum include?

As with all contracts, addendums must be clear and precise. They should: 

  1. Clearly state that the document is an addendum and reference the original contract. 

  2. Identify all parties involved and confirm they agree to the changes in the addendum. 

  3. Specify the date when the addendum takes effect. 

  4. Reference the original contract, its date, and any relevant sections or clauses.

  5. Describe why the addendum is being added and what it aims to achieve. 

  6. Outline the specific additions to the original contract. 

  7. State that all other terms and conditions of the original contract remain in effect.

In some cases, an addendum may have to be witnessed or notarised, but this isn’t always necessary. 

What is an amendment in contract law? 

In contract law, an amendment is a formal addition to an existing contract. They are used to update or alter specific provisions in a contract so it remains relevant and accurate as circumstances change. 

Amendments clearly outline the exact changes to be made to the original contract. This can include adding new clauses, modifying existing terms, or deleting sections.

When are amendments most commonly used to change a contract? 

Amendments to contracts are often used to:

  • Change the scope of work, 

  • Adjust payment schedule, amounts or methods. 

  • Extend or shorten the contract. 

  • Change deliverables or deadlines. 

  • Alter roles and responsibilities. 

  • Clarify, correct, or enhance clauses. 

  • Update contact information. 

  • Correct errors or omissions. 

  • Add or remove parties. 

  • Update confidentiality or non-disclosure terms. 

What’s the difference between an amendment and an addendum? 

Addendums are ideal for adding new terms, conditions, or sections not originally part of the contract. They supplement the existing agreement without altering the original terms.

Amendments are suitable for changing the existing terms and conditions within an original contract. They directly alter specific clauses or provisions to reflect new agreements between the parties.

Addendums and amendments in action 

Here are some real-life examples illustrating the use of addendums and amendments in contracts:

Examples of Addendums

Property

A buyer and seller have signed a real estate purchase agreement, but after the inspection, they agree to include additional repairs that the seller will complete before closing.

An addendum is added to the original purchase agreement specifying the repairs agreed, the timeline for completion, and associated costs.

Employment contract


An employee's role evolves to include new responsibilities not covered in their original contract.

An addendum is added to the employment contract detailing the new responsibilities, any additional compensation, and changes in reporting structure, while the original contract terms remain in effect.

Examples of Amendments

Loan agreement 

A borrower and lender agree to change the repayment schedule of a personal loan agreement due to unforeseen financial difficulties faced by the borrower.

An amendment is made to the loan agreement modifying the repayment dates, amounts, or interest rates, directly altering the relevant clauses in the original document.

Business partnership agreement 

Partners in a business decide to change their profit-sharing ratio after a few years of operation to reflect new investments or contributions.

An amendment updates the profit-sharing section of the original partnership agreement, specifying the new percentages and how they will be calculated.

11 tips to avoid problems when modifying contracts

Modifying contracts can be risky if not done correctly. For example, an amendment to a contract could significantly change its interpretation, or make it unenforceable.

Here are 10 tips to avoid problems when modifying contracts: 

  • Avoid vague language and clearly state what is being changed, added, or removed. 

  • Use the correct format for either an addendum or amendment

  • Reference the original contract in the addendum or amendment

  • Make sure all parties involved in the original contract sign the addendum or amendment

  • Ensure that the modification includes consideration (something of value exchanged between the parties) to make it enforceable. This is particularly important for amendments.

  • Review modification clauses and follow these requirements to ensure changes are valid. 

  • Ensure that the addendum or amendment is consistent with the rest of the contract and does not contradict existing terms unless intentionally changing them.

  • Provide all parties with a copy of the updated contract to ensure everyone is on the same page.

  • Consult a commercial lawyer to ensure the modification is legally sound and protects your interests.

  • Avoid making the modification overly complex.

  • Only include necessary changes in the addendum or amendment. 

Can you add an amendment to an addendum? 

You can add an amendment to an addendum in much the same way you would amend a contract in the first place. 

The amendment should clearly state it is modifying the addendum and not the original contract. The amendment must also not contradict the terms of the original contract unless the original contract is being changed to accommodate the new terms in the addendum and its amendment. 

Get expert help with updating a contract 

If you need help with drafting or modifying a contract, our network of expert commercial lawyers is here to provide fast, affordable expert help. 

Your lawyer can support you to: 

  • Identify the most appropriate method for modifying your contract. 

  • Draft clear and precise addendums or amendments according to your needs.

  • Follow all the steps to make the modifications legally binding and enforceable. 

  • Provide support and advice for any contractual issues you may encounter. 

To get started, schedule a call with our Legal Assessment Specialists today for a free case evaluation and quote for the services of an expert solicitor. At Lawhive, we’re committed to providing you with straightforward, professional legal assistance to help you navigate the complexities of contract law with confidence.

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