Even if a legal contract is working well, there may be situations where the signing parties wish to modify a couple of its terms. Rather than tearing up the entire contract and starting over, it’s possible to amend the contract using an addendum. This makes the required changes while leaving the rest of the contract intact.
What Is a Contract Addendum?
An addendum is an easy way to modify an existing contract. It’s called an addendum because, instead of writing and signing a new contract, the parties prepare a list of all the changes and attach it to the original contract. In law, an addendum is simply an addition – something to be added.
Addenda may be used in all sorts of situations in which the parties wish to modify some of the terms of a contract but leave the majority of the contract intact. Legal documents are often lengthy and complex, and it would be time-consuming and expensive to rewrite the entire thing simply to add a new performance obligation or a closing date for a sale. It is much quicker to write an addendum in which, for example, the parties wish to:
- Add a new clause.
- Replace a clause with new language.
- Change a date.
- Extend a deadline.
- Clarify language that could be ambiguous.
Writing a Contract Addendum
The sole purpose of an addendum is to identify all the changes made to the contract. This sounds straightforward, but there are a few drafting techniques that help ensure the addendum is enforceable.
- Title the addendum by connecting it to the original document. For example, ''Addendum to the Contractor Agreement Between Acme Industries Inc. (client) and Edward Jones (contractor) dated July 12, 2018 (hereinafter referred to as the original contract).''
- Specify the date that the addendum goes into operation. For example, ''This addendum shall be effective as of 1 January 2020.''
- Be specific in listing the required changes. For example:
- Add a concluding paragraph confirming the original contract stays in effect, which is often known as a restatement clause. The following clause is commonly used in legal addenda: “The parties reaffirm no other terms or conditions of the above mentioned original contract not hereby otherwise modified or amended shall be negated or changed as a result of this here stated addendum.”
- Include a signature block for all parties to sign alongside their printed names. A contract addendum is enforceable only if all the original signing parties sign the addendum, or appoint an agent to sign on their behalf.
- Add a notary block and ensure the parties’ signatures are notarized.
A quick browser search should turn up a number of templates that make the drafting process much easier.
Making Sure an Addendum Is Enforceable
The addendum must comply with the original contract terms to be enforceable. Many legal documents block the parties from modifying the terms of the contract, so you should have an attorney check whether an addendum is the right solution for this particular contract. Finally, attach the signed and notarized addendum to the original contract (or vice versa). Attaching the two documents alerts anyone looking at the original contract that there are amendments that need to be reviewed.