Your Complete Overview of Contract Amendments and Addendums
Have you ever had a client change their mind about how many hours of coverage they want you at an event, the scope of a project, or even whether they want to change up the date or location? But then you don't know how to change the terms correctly in your contract or add terms to your existing contract? A common source of confusion in the world of contracts revolves around this very issue: the difference between a contract amendment and a contract addendum. Let’s go over which document you need to use when changing or adding terms to your contract.
Why You Might Need a Contract Amendment or Addendum
Let's start with the basics. When would you use a contract amendment or addendum? We know that contracts are the backbone of any business relationship with clients by setting the rules of engagement and ensuring that both parties are on the same page from the beginning. But what happens when circumstances change and you need to change the terms of the contract after you and your client have signed? This is where a contract amendment or addendum comes into play. Depending on what is being added or changed you will be using one of these simple, usually one-page documents to make sure your contract remains up to date and clear terms remain intact between you and your client.
What is a Contract Amendment
Now, let's shift our focus to the contract amendment. An amendment is a formal alteration made to the original contract, essentially rewriting specific sections to reflect the new terms. Unlike an addendum, which supplements the existing agreement, an amendment modifies the actual language of the contract. For instance, If you are a website designer and you agree to change the scope of your design package beyond what was agreed upon in your contract (such as designing 10 website pages to now designing 20 pages which changes the scope and the payments due), this is when you would use a contract amendment.
Here is a helpful cheat sheet on when you would use contract amendment:
- Changing the payment terms or payment dates
- Modifying the scope of work
- Altering the duration of the contract
- Adjusting pricing or fees
- Changing a model release clause to more of a privacy clause
What is a Contract Addendum
Let's say you are a photographer and you and your client already have a wedding photography contract signed but 2 months before the wedding the client decides they want to add on a second shooter to their package and you need to now make that change in your contract, or let's say you are now offering social media coverage of the event on top of your photography and you need to clarify exactly what you will be delivering day-of on your client’s social media accounts and then any additional deliverables after the event to your client. In both of these situations, you wouldn't need to cancel your old contract and sign a new one but, instead, you would want to use a contract addendum to add clauses or a few sentences to your existing contract to account for these changes. A contract addendum is a supplementary document of your contract that adds, clarifies, or modifies specific terms without overhauling the entire agreement.
Here is a helpful cheat sheet on when you would use a Contract Addendum:
- Adding clauses or provisions
- Clarifying ambiguous language
- Addressing unforeseen circumstances (like increased travel fees)
- Extending deadlines or timelines
- Adding on services or additional service providers to your package
Tips On How To Execute Contract Amendments and Addendums Like a Pro!
Tip 1: Details Matters!
Whether you need an amendment or an addendum, attention to detail is key. Clearly address the original contract and outline the changes you will be making and then ensure all parties sign at the bottom to avoid any confusion. All parties should fully understand what they are agreeing to regarding the changes that have come up.
Tip 2: Talk it Out!
Before sending any amendments or addendums make sure you open up a channel of communication with the other party (in an email of course for written documentation!). Discuss the proposed changes, address concerns, clarify things that need to be clarified before writing up the addendum/amendment, and overall just ensure everyone is on the same page. It's the secret sauce for a healthy business relationship with your clients and also serves as additional evidence or proof of what the purpose of the amendment or addendum was in case you need that later on.
Tip 3: Keep it Legit: Put it in Writing
Verbal agreements are not enough! Once you’ve decided on the course of action with your client(s) surrounding the modifications needed, document all changes in writing through a formal legal amendment or addendum, and make sure both parties have a signed copy (if you send the document through an online contract sending platform or CRM everyone can save a copy). This helps create a paper trail that could be invaluable should you have a dispute down the road or even need to get a court involved. The Legal Paige makes this easy with our combined Contract Addendum & Amendments for General Purposes that you can use each time you have additions or changes to your contracts. It’s really a necessary and essential legal document to have in your legal toolkit as a business owner!
Now that you understand contract amendments and addendums like a pro, next time you find yourself in a situation where you need to modify or add on to your contract, make sure you utilize a contract amendment or addendums. Check out all The Legal Paige amendments or addendums HERE!
THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. EVERY SITUATION IS DIFFERENT & IS FACT-SPECIFIC. A proper legal analysis is necessary based on your location and contract. Consult an attorney in your home state for advice regarding your contract or specific legal situation.
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