Addendum to the contract, also called contract amendment or an amending agreement, is any document added after the signing of the agreement to modify its terms. 3 min read updated on August 13, 2020
If you've entered into a legal contract, an addendum to the contract is any document added after the signing of the agreement to modify its terms while leaving the rest of the contract intact. This can also be called a contract amendment or an amending agreement; however, an amendment is generally not made with a separate document.
An addendum to the contract defines the definitions, sections, clauses, and terms that need modifying, and all parties must agree to and sign off on them. The language of an addendum is sometimes tricky since the law requires all parties to a contract to abide by its original language. For this reason, you must make sure not to create unintended consequences or loopholes with the addendum. Learn more about contract review attorney fees.
Contract addendums are typically used when:
Larger changes, such as those that impact the contract's focus and structure, require an entirely new agreement. For example, you'd need a new contract if you were moving into a different property managed by the same company.
Consider having an attorney review any contract addendums, particularly for agreements that involve large sums of money or last for longer than a few months.
When adding specific terms or conditions while maintaining the original contract validity, you need to create an addendum. However, making some types of changes doesn't require an addendum. These include cases in which a party has agreed to waive a contract breach by the other party. This is known as a consent or waiver, which means that the parties agree to continue with a contract despite a minor term being neglected.
When writing your addendum, follow these guidelines:
Addendums are not enforceable unless they comply with the existing contract terms. Many contracts provide specific circumstances under which terms are modifiable. Review the original contract and look for terms that prohibit addendums, allow one party to change the contract without the other party's consent, or otherwise provide requirements for addendums.
Make sure that the addendum complies with applicable laws, which are usually found at the state level. The Uniform Commercial Code (UCC) governs purchase contracts and does not require that a contract addendum include consideration. However, they do require the mutual assent of all parties.
A contract addendum cannot be legally enforced unless both parties fully understand the new terms and agree to them in writing. All parties who signed the original contract must also sign the addendum; if one or more parties are unavailable, they can appoint agents who have the authority to sign on their behalf.
You'll also need to exchange another asset or promise to ensure the addendum has consideration and thus constitutes a valid contract. Consult an attorney if you're not sure whether consideration is a requirement since this depends on both state and contract law.
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