Amendment vs Addendum: What's the Difference?
In real estate contracts, an amendment refers to a change made to the terms of an already signed contract, while an addendum is an additional document that adds new terms or details without altering the original agreement. Both amendments and addendums must be signed by all parties involved to become legally binding. They are used to ensure all contractual obligations and agreements are up-to-date and clear to all parties.
Here's an overview of these documents' distinct meanings and implications:
- Amendment: An amendment refers to a modification to an existing contract. It alters the terms or details of the contract after it has been signed by all parties. Amendments are typically used to change clauses, correct errors, or update terms based on mutual agreement of the parties involved. An amendment must be agreed upon and signed by all parties, just like the original contract.
- Addendum: An addendum, on the other hand, is an additional document that is added to the existing contract to include supplementary information or clauses that were not included in the original contract. An addendum does not change the original contract but rather adds to it. Addendums are used to clarify and provide details on aspects agreed upon but not detailed in the main contract. Like amendments, addendums must also be agreed upon and signed by all parties.
Both amendments and addendums are legally binding once signed and form part of the original contract, effectively modifying or expanding the scope of the agreement as specified. The correct use of these tools is crucial in ensuring that all parties have a clear, updated understanding of their rights and obligations under the contract.
