Whether you are dealing with a business as a customer or you are running a business yourself, you must know that there are all sorts of contracts and legal agreements needed to run any kind of business.
Such contracts and legal agreements ensure that all parties involved in a deal are agreeing to the same terms. However, if there are any disagreements with a given contract or agreement, then the parties might want to add or change the terms of a given contract.
To make such changes to a given contract, you will need to use either an addendum or amendment to contract modifications and more. And to help you pick the right between addendum vs amendment for fixing issues in a given contract, we are here with a complete guide on the difference between an amendment and an addendum. This way, you can pick the right method to make changes to your contracts by going through this guide till the end.
In this article
What is a Contract Addendum?
Before you can understand the difference between an amendment and an addendum, let’s learn about each of these separately starting with what exactly is a contract addendum.
Starting with the basics, a contract addendum is obviously used to make changes to a given contract. This is generally used when one of the parties involved in a contract has missed adding a certain condition to the contract.
So, in simpler words, if a party wants to add more terms and conditions or a certain policy to a contract without changing the existing details, then a contract addendum is used.
For example, a contract addendum might be used to extend the duration or the timeframe of a contract. It can also be used to update the contract if the scope of your given project has expanded and more tasks are to be completed compared to what was planned originally.
What is a Contract Amendment?
If you want to use an amendment to contract modifications and make the required changes, then understanding the same is equally important as well. So, let’s learn about contract amendments as well.
Similar to a contract addendum, you are also supposed to use an amendment to contract modification and changes. This can be useful when the parties involved in a contract want changes to the same. However, a contract amendment is more than just adding more terms and conditions to an existing contract. Instead, a contract amendment lets you correct and change existing terms, alter information if needed, and obviously add newer ones as well.
For example, a contract amendment can be used when a deadline didn’t exist in a contract originally, but one needs to be added later on. Similarly, if the parties don’t agree to an older statement in a given contract, those older statements can also be altered using a contract amendment.
Difference Between an Amendment and an Addendum
Now that you know the basics, let’s understand the difference between an amendment and an addendum. While there are various factors to consider to understand the addendum vs amendment comparison, here are the major differences between these:
- Information Addition: If you want to add information to an existing contract or agreement, then both addendum and amendment will let you do that. This is useful for updating information that was missed.
- Information Alteration: If you not only want to add new information but update the existing information in a contract as well, then only an amendment will let you do that.
- Error Correction: Apart from changing policies as per a party’s new requirements, you can also correct any potential errors in a contract by using an amendment.
- Duration Alteration: Another possibility that you may have while working with contracts and agreements is that the duration or the validity of the contract might need to be extended which is only possible using an amendment.
- Involved Parties: While it is certainly not common, some scenarios may require changing the parties involved in a given contract or agreement as the involved interests change. You will need to use an amendment in that case.
When to Use Addendum vs Amendment?
By now, you must have a pretty good idea about all of the differences between an addendum vs amendment. With the information given above, choosing the right method for changing contracts and agreements should be easier. However, if you are still confused about when to use addendum vs amendment, let us help.
Because an addendum is primarily made to add information and statements to a contract, it can definitely be a great option for renewing contracts. However, since it cannot change existing information or change things like the duration and involved parties, it is quite limiting. Thus, an addendum should only be used for basic changes.
On the other hand, an amendment lets you add information, remove information, change information, correct errors, change the duration, change the involved parties, and pretty much everything else. In other words, if you want to make big changes to a contract or agreement and change how it functions, then you will definitely need to use an amendment for the same.
Who Can Write an Addendum Versus an Amendment?
As you would know, almost all contracts and agreements are legal documents and they have a specific format because of the same. This means that when using an addendum or amendment, you need to make all changes in a way that the contract stays legally valid.
Thus, make sure that you are at least using an addendum or amendment template to have an outline of how you need to design yours. And if your business has a legal team, consulting your paralegals and lawyers is definitely the better option.
Wondershare PDFelement: How to Create Addendums and Amendments
Once you have gone through the addendum vs amendment comparison above, you must have a pretty good idea about the difference between an amendment and an addendum.
Now that it is out of the way, you might be looking for a tool for creating addendums and amendments as needed by your business. In that case, you should definitely consider using Wondershare PDFelement - PDF Editor Wondershare PDFelement Wondershare PDFelement since it offers various features like the following:
- PDF Management: You can easily merge and convert PDF files using Wondershare PDFelement if needed.
- E-Signature Support: Since you are working with legal documents, the e-signature feature comes in handy for signing documents with ease.
- Create and Organize: Not only can you create addendums and amendments using templates, but you can also organize them easily once created.
- AI Support: Thanks to the support for AI, you can automate a lot of tasks needed for making PDF files. This even includes writing an addendum and amendments as AI can do that for you automatically.
Because of these features, making an addendum or an amendment is quite easy as explained here:
Step 1
Install and open Wondershare PDFelement on your PC.
Step 2
Here, open the Template option and find any legal document template.
Step 3
You can either choose a generic one or one made specifically for addendums and amendments.
Step 4
After opening a template, edit the data as needed. At last, click on File and select Save As to export your addendums and amendments as PDF files that can be easily shared.
Tips for Effective Addendum and Amendment to Contract Modifications
While having the right tool is definitely important, you should also check the following tips for effective addendum and amendment to contract modification:
- Use the same language for your addendums and amendments as the one used in the original contract.
- Make an easy-to-understand title for your addendum or amendment.
- All parties involved in the contract should be clearly mentioned.
- Refer to the parts of the contract that are being affected.
- Ensure all addendum and amendment documents are legally sound.
- Consider getting legal advice for your addendums and amendments if needed.
Conclusion: Addendum vs Amendment to Contract
Even if you and your business have sound and secure contracts in place, you will still need to alter with time. As the interests of the parties involved can change over time, the corresponding contracts and agreements also need to change.
Since such documents are legally valid, they can only be modified using certain practices like addendum and amendment. And to help you pick the right one, we have explained all the differences between addendum vs amendment up above. If you are still confused about any specific difference between an amendment and an addendum, feel free to ask questions in the comments below.