Contract Amendment VS Addendum. What Are The Differences?

contract amendment

After you sign a contract, you might have to frequently change it. If your organization handles contracts on a regular basis, you will almost certainly need to create a contract update or addition at some point. As a result, understanding the key differences between contract amendment vs addendum is critical before employing either of the two.

Both Terms Explained

Addendums and amendments appear to be the same thing, and they can produce comparable  consequences in some situations. It is crucial to emphasize, however, that these contracting ideas are  unique and perform quite different functions. The fundamental distinction is that amending a contract  affects its terms, but an addendum keeps all prior contract clauses while adding new ones.

Contract Amendment

A contract amendment is a document that alters an existing contract in order to enhance, correct, or 
explain any issues in the original document. In other words, an amendment replaces a component of an 
agreement’s present terms and conditions.

Contract Addendum

You handle addendums differently than amendments, even though an addendum is a type of amendment.

Rather of changing the document, they add something new to it. After all parties mentioned in the contract agree to it, the amendment becomes a part of the new contract.

Contract Addendum VS Amendment?

A party drafts amendments and addendums after they sign the first contract. Both papers try to  improve or broaden the agreement between two parties. Furthermore, below are the key distinctions between the two:


A contract amendment alters an existing clause or many provisions. Consider revisions to be  modifications to the original agreement (for example, extending a previously agreed-upon deadline).

An addendum to a contract is a document appended to the original contract that details the  amendments to the contract. Addendums do not change or replace the original contract.


Only the signing parties or their legal representatives can make amendments. Any party can make addendums, including third parties like title companies, etc.


One often creates an amendment by redlining and making modifications to the original contract, rather than adding new terms. When making modifications to an existing contract, you  may cross out any wording that no longer applies and have both parties sign off on the changes.

An addendum is a document that is appended to an existing contract but does not change the original  wording. Both parties must sign the amendment to make it legally binding. You should also attach a declaration that says “This document is void without Addendum A” (B, C, etc.) to the original contract.


When the parties desire to change a few of the terms and conditions of an existing agreement, they make an amendment. They are typically employed when external pressures, such as cost fluctuations or  additional regulation, may have an impact on the contract. Some common uses of contract amendment include:

  • Price fluctuations
  • Changes in demand
  • Adjusting the closing date
  • Occurrence of unforeseen circumstances
  • Difference in enforceability 

When the parties want to add terms and conditions to the contract that were not originally included, they normally construct an addition (addendum) rather than an amendment. Some common examples of contract addendums include:

  • Sales contingencies
  • Loan assumptions
  • Disclosures
  • Back-up contract addendum
  • Partner additions


After the parties negotiate and agree on them, amendments become part of the legal contract. As a  consequence, the parties have the opportunity to negotiate and make changes before they become  legally binding.

Once added, an addendum is considered a part of the legal and binding document. If you make or accept any modifications, you must include the addendum otherwise the changes will be void.

Amending A Contract Before It Is Signed

Any alteration made prior to the contract’s completion is not officially an amendment. You can amend the conditions and have them acknowledged as part of the original transaction before the parties sign the  contract. One can also make minor changes (typo corrections, etc.) shortly before signing the contract.

Using A Contract Management Solution To Manage Amendments & Addendums

Changes or revisions are an inevitable aspect of a contract’s lifespan and need effective administration 
and monitoring.
Therefore a contract management software automates contract amendment procedures and  workflows. 

It will not only let you make the modifications, but it will also maintain track of all versions to avoid misunderstanding. Your contract modification process will be transparent, smart, and effective if you invest 
in an intelligent contract management system.

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