How to Write a Contract Addendum
An addendum is an addition to a formal document like a report, contract or proposal. The addendum comes after the release or publication of the original document and is used when the complete rework of the initial document is either not required or is deemed too costly. For a legal document, addendums are used when supplemental information needs to be added to the original body of work – for example, additional terms, specifications or other information.
An addendum is different from an amendment. Amendments are used to make changes to the original document, such as corrections, editing or clarification, usually before the document is finalized, signed or released. Amendments often occur as the contract is being constructed.
Addendums are used to provide additional information to the document after signing, mainly to add something that may have been omitted or overlooked. In the simplest terms, the amendment changes the document, whereas the addendum adds to it. An addendum can be created by anyone but only becomes part of the contract once approved by all parties involved.
You might wonder if an addendum supersedes a contract. While an addendum typically supersedes a contract – since the addendum comes after and will have been signed more recently, making it a legitimate part of the contract document – best practices are to clearly state this in the addendum.
The original contract should acknowledge the potential for addendums or specify rules on how it may be modified, and the language used in the addendum should clearly reference the portion of the original document that it is meant to supplement. It’s best to be sure all involved parties recognize that the addendum becomes a binding part of the contract.
Writing a contract addendum will require a good understanding of the contract in question as well as knowledge of the applicable laws and codes (for example, real estate contracts or freelance work contracts).
- Ensure that the addendum is visually consistent with the style of the original document, including font, formatting and language.
Be sure to reference:
The original document, contract or report.
- The individuals and parties associated with the contract along with their roles.
- The date of the original contract.
- The date the addendum shall go into effect.3. Write a detailed reference to the parts of the original contract that are being changed, altered or supplemented. Use formatting (bold, italics, strikethroughs) to make clear what is being modified.
When you've finished, do the following:
- Attach the original contract and refer to it in the text of the addendum.
- Add a signature block for all parties involved in the original contract, including their typed or printed name, a space for their handwritten signature and a space for a handwritten date. It’s likely the signature block will also require either witness signatures or a notary signature and stamp. Be sure to check the requirements with a legal adviser.
- Once all parties are in agreement, the document may be signed.
In cases where an original contract or addendum involves large sums of money, property rights, business agreements or anything outside one party’s areas of expertise, it’s recommended to consult with a lawyer or legal adviser. An attorney can help to shape the document and choose particular phrasing to ensure an addendum makes the desired changes without opening additional loopholes.