Addendum vs Amendment: How Do They Change Contracts?

I had a friend who once mixed salt in her coffee instead of sugar. When I asked her, she had only one thing to say: they both looked similar. Most people trying to choose Addendum vs. Amendment in contracts have the same thing to say.

While they might look or sound similar to you, it is best not to get mixed up! After all, they both serve different purposes when it comes to contracts.

We all know that a contract is signed between two parties who are trying to reach an agreement. The contract is a legally binding document that outlines all the rights and responsibilities of both parties.

However, there are times when you might need to make certain changes to the contract. For example, you might want to extend the deadline a little. Or maybe you want to add another clause to the contract.

But you do not need to make a whole new contract for a small thing like that, you know? You can simply make changes to the existing contract. And that is when you need to know what addendum and amendment is.

Hi. In today’s blog, I will talk about the difference between these two forms of contract changes. If you want to know about the differences, similarities, and usage of these two contractual terms, you have come to the right place!

So, keep on reading this blog till the end, and thank me later…

Addendum vs Amendment: Are They The Same?

Considering the fact that these two terms are often used interchangeably in a sentence, it is obvious that you might get confused about what they actually mean.

While it is true that these two are used to make changes in contracts, the way in hich this change happens is very different.

• An addendum is like adding an extra page to a book. It includes new information that was not in the original contract but does not change what is already written.
• An amendment is like editing a book. It changes words, clauses, or sections of the original contract.

Before talking about the difference between addendum vs. amendment, let me explain what these two terms mean in the first place!

What is a Contract Addendum?

Let’s say you already have the contract ready. But you want to add new terms to that. With the help of a contract addendum, you can easily do that.

This is a separate document that adds the new terms to your existing contract without making any changes to the original content of your contract.

Let me give you a few examples!

Your company hires a freelancer who is only going to be working for 6 months according to their contract. But now the company has decided to extend the terms of the employment for another 6 months.

In a case like that, they need to have a contract addendum where they add the details of the extension without making any changes to the original freelance employment contract.

Similarly, if your landlord decides to allow pets in the apartment after you have signed the lease, they can add a pet policy addendum without changing the original lease agreement.

What is a Contract Amendment?

When you want to make changes to the original contract, you need to have a contract amendment.

A contract amendment (or amendment of any kind) changes the original content of the contract. With the help of an amendment, you can remove or modify an already existing contract terms.

Most of the time, people who are bound by the contract use amendments when the document is either incorrect, outdated, or no longer works for the parties.

Here are a few examples that might help you understand it better!

Let’s say a particular contract mentions that you need to complete a project by 1st March. However, you and your employer agree to change the deadline to 1st April. In a case like that, you will be amending the contract with the new deadline.

Similarly, if a business contract states that the employees will get a bonus of $5,000 at the end but corrects the amount to $50,000, they would choose an amendment to rectify the error.

Addendum vs Amendment: What is the Difference?

The biggest difference between an addendum and an amendment is how they change a contract:

Feature	Addendum	Amendment
Purpose	Adds new terms	Changes existing terms
Effect	Expands the contract	Edits or removes contract terms
Example	Adding a late fee policy to a rental contract	Changing the rent due date from the 1st to the 5th of the month
Legal Requirement	Must be signed by all parties	Must be signed by all parties
Structure	Separate document	Changes are made within the original contract

An addendum works like an extra attachment, while an amendment edits what is already there.

Addendum vs Amendment: When Can You Use Them?

Knowing when to use an addendum versus an amendment is important.

Use an addendum when:

1. You need to add a new clause, condition, or term to the contract.

2. The original contract remains unchanged, and the new terms are additional.

3. You want to clarify something that was missing in the original contract.

Use an amendment when:

1. You need to correct a mistake in the contract.

2. You want to change an existing condition or term.

3. You need to remove an outdated or unnecessary clause.

For example, if a company wants to add a confidentiality clause to an employee contract, they use an addendum. If they want to change the employee’s salary, they use an amendment.

Addendum vs Amendment: Who Can Make Them in Contracts?

Now that you are aware of the differences between an addendum and an amendment in a contract let me tell you who has the power to make these changes in the contract.

I mean, you cannot simply change a clause in a legal contract just because you think “it does not work” for you anymore, right?

TBH, any of the parties who are involved in the contract can propose either an amendment or addendum in a contract. However, both the parties should agree upon the changes.

Here are some of the people who have the power to make changes to the contract in the form of addendums or amendments:

• Business owners and companies: If a company signs a contract with a supplier and later needs to adjust delivery terms, they can request an amendment.
• Landlords and tenants: A landlord might add an addendum for new building rules, while a tenant might request an amendment for a change in lease terms.
• Freelancers and clients: A freelancer may request an addendum to include additional work that was not part of the original contract.
• Employees and employers: An employer might amend a contract to increase an employee’s salary or extend a job position’s duration.

No matter who proposes the change, all parties must review, agree to, and sign the document for it to be legally valid.

Who Can Help You With Addendum and Amendment

In conclusion, if you are planning to modify a legal contract, it is best that you check with a legal professional who has a clear knowledge of which type of modification you need.

People who have knowledge of these two changes include:

• Lawyers.
• Business consultants.
• Real estate agents.
• HR professionals.

I hope you do not make the same mistake my friend made when she was making coffee. It is very important that you understand the differences between addendum vs amendment.

After all, making mistakes when it comes to contract modification can lead to several legal issues. And trust me when I say this: these can turn pretty serious.

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