An addendum is a way to amend or clarify a legal document. An addendum to a contract, for example, can define some of the terms in the contract or change a couple of the clauses. You can use addenda even if the document is already signed, provided everyone who signed it agrees. The rules for creating addenda are the same as for creating the original documents.
When to Use Addenda
Addenda are useful for amending standard documents. If your real-estate agent submits a standardized purchase offer for a house, for instance, you can request an addendum to add special concessions you want. If you've already signed a sale agreement but haven't closed, you can go back and clarify or change things -- for example, if you want it clear which fixtures are sold with the house. A codicil to a will can cover items or beneficiaries you didn't mention in the original document.
Following the Law
Addenda to legal documents have to follow the law. If a will in your state requires the signature of two witnesses, for example, your codicil also needs two signatures. Someone who can't legally draft a contract can't legally write an addendum. Ohio real-estate agents, for example, can fill in blanks on a standard contract but can't write one or write an addendum. Doing so counts as practicing law, which the state doesn't think they're qualified to do. If you're attaching the addendum to a signed contract, the other party has to sign the addendum too.
If you use an addendum to change a contract, you need to specify exactly what you're changing. For example, you can say that "Section Three is replaced entirely by the following" and then write out the new text in the addendum. Date the addendum so there's no question it's the most recent version Don't hesitate to consult a lawyer if you're not sure how to phrase an addendum. Some real-estate agents have attorneys draw up standardized addenda, then just pencil in the changes in price or dates.
Addenda can make the original document clearer, by clarifying phrases or terms. They can also confuse things. If, say, you write codicil that amends a bequest in your will, the changes may be inconsistent with other parts you didn't mean to change. The more addenda you add to a document, the more likely it is you'll confuse things. Eventually it becomes safer to rewrite the document from scratch.
You'll create even more confusion if you end up with several inconsistent copies of the same signed document. Updating a single copy of the document often isn't good enough if there are other copies floating out there. To be completely clear, you should update all copies so everyone reading it knows the addendum is the latest form. If you work for a business, your company should have guidelines in place to deal with this.