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An addendum (sometimes also known as a “rider”) is a document that can be added to an existing legal document to help modify, more clearly define, or even nullify one or more of its original terms. This can make it much easier for parties to make changes to an already signed agreement without having to break or end the main contract.

Read on to find out how addendums function in practice. We’ll also highlight a few examples of cases where addendums can be used to help add special contingencies to your draft or signed legal contracts and agreements.

Read more: How to make a Contract Legal?

How Addendums Work

When a contract is signed, its terms will usually stay in place until it reaches its natural end. However, sometimes events arise that require a change to the original agreement. This is where an addendum might come in.

Addendums are additional documents that can be added to the end of the form to act as an extra further term or set of terms within the main contract. These will revise the agreed-upon conditions of the previously arranged deal as discussed upon ratification by both parties.

The addendum document itself might be a supplementary form but it must be stylistically the same as the original contract and correctly titled in the same manner. It must also be signed by all parties involved in the original contract in order to be valid.

Some of the things an addendum can be used to do include the following:

  • Change or extend the dates of an agreement
  • Alter the payment structure of a contract
  • Clearly define work that is to be done in more detailed terms
  • Add new requirements to the contractual terms

Amendments Vs. Addendums

Amendments and addendums have a lot in common but are quite different in practice.

First of all, amendments refer to an actual change in the original contract document. These are normally only used for small differences like swapping the name of a product out of a bill of sale or purchase agreement. These can also only be modified and signed by the original parties.

Addendums on the other hand add a new document that can be attached to the contract. It does this by adding terms that override the language of the original form. These changes can also be made by outside professionals such as attorneys. The modifications that are made are usually more complex in nature and once signed by the original parties in the agreement, they are fully legally binding.

Addendum Examples

Addendums are used quite frequently for a range of legal documents. This is especially true in the real estate industry or in construction where the nature of financing and agreed conditions can change over time.

A few examples of contracts where addendums are commonly added include the following:

Read more: How To Make A Contract Legal