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What is an Addendum to a Contract?

What is an Addendum to a Contract?

An addendum to a contract is a great way of altering the effects of an existing contract without destroying the original agreement.

4th February 2020
Reading Time: 2 minutes

An addendum to a contract is the addition of a document to an existing contract to modify its effects. It is a valuable tool for people who wish to alter a contract’s terms without destroying the original agreement. It will likely take the form of a simple contract, outlining the changes to be made, and contain both parties names, signatures and the date of effect.

Depending on the form of the original contract, the document will be attached in the most convenient way possible.

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There are several key benefits to using addendum. Namely, that it:

  • It saves money. An addendum to a contract means you can use a template. It avoids using a lawyer to renegotiate and saves you money.
  • Is often faster than alternatives. Not having to engage a lawyer saves you time and allows whatever changes you want to be made faster. Likewise, as it is an addition to a contract you won’t require a renegotiation of the rest of the contract.
  • It’s simple. As it will appear with the original contract, it will be clear what effects it is intended to have.

Some points to keep in mind

There are, however, a few points to keep in mind.

  • Consistency is key. Not only do the terms of the addendum need to remain consistent with the original contract but so does the formatting. To avoid any confusion, using the same fonts, margins and language will ensure that there’s no uncertainty as to whether the two documents are related.
  • Not all templates will fit. Be sure that the document you’re adding is the correct one for your situation. While templates exist, not all of them will fit your situation.
  • An addendum will be legally binding. Whatever you put in the additional document will bind you, so be sure that you agree entirely with its effects before you sign.

Ultimately, while an addendum to a contract is an efficient way to amend existing contract terms, every situation is different. Contacting a lawyer for advice will ensure you make the best decision for yourself. Fortunately, with LawPath seeking advice from a contract lawyer is easier than ever.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

Daniel Fane

Daniel is a Legal Tech Intern at Lawpath. He is currently studying a Bachelor of Laws/Bachelor of Business at the University of Technology Sydney. His principal fields of interest are in commercial, corporate and intellectual property law.