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Contract Addendum
A contract addendum amends the terms of an existing contract, without replacing it. In its truest sense, an addendum is created after the completion of the contract, although some people might loosely refer to an appendix or an exhibit as an addendum. In most instances, the addendum must meet the same level of formality as the original contract. Contract addenda can be used to address a number of circumstances, including the following:
- Correct scrivener’s errors, omissions, or mistakes – sometimes the parties agree that the final, signed version of a contract contains a drafting error or other mistake. Using an addendum is a way to correct the mistake. For example, perhaps parties agreed to a forum selection clause naming California as the state for litigation. The drafter, using an old template, inadvertently left New York in the relevant paragraph and no one noticed until a few weeks after the execution of the contract. The parties both agree that the mistake should be corrected. An addendum could be used, correcting only the paragraph at issue.
- Address changes in circumstances – sometimes parties are happy with their contract, but it needs a tweak here or there due to the passage of time and changed circumstances. For example, consider a construction contract in which two parties agree that a certain engineer will be used. The engineer has now passed away. The parties could agree to name a new engineer in an addendum. In a similar manner, parties sometimes agree to change dates, standards, quotas, and other terms, without changing all the other provisions of the contract.
Frequently Asked Questions
What’s the difference between an addendum and an exhibit?
An addendum is created after the original contract is signed and changes its terms. An exhibit or appendix is attached at signing and supports the contract, like a price list, drawings, or a service schedule, without altering the agreed terms. People use the words loosely, so read what the document actually does rather than trusting its title.
Does an addendum need to be signed by everyone?
Generally yes. An addendum usually has to meet the same formalities as the original contract, which means all original parties sign it. If the first contract was notarized or witnessed, the addendum often needs the same treatment. Skipping a party’s signature is a common reason an addendum later fails to hold up.
Can an addendum fix a typo in a signed contract?
Yes, and that’s one of its most common uses. If both sides agree the executed version contains a drafting error, an addendum can correct just the affected paragraph while leaving the rest untouched. Say clearly which section you’re replacing, quote the corrected language, and note the date the correction takes effect.
