How to Write a Contract Addendum

Co-authored by Clinton M. Sandvick, JD, PhD

Last Updated: November 4, 2022 Approved

A contract addendum is a document that is added to an existing contract to modify the terms of the agreement. If properly executed, it leaves the original contract in full force and effect and only modifies the specific terms described in the addendum. Note that any change to an existing contract which is not incorporated through a separate document is an amendment and not an addendum.

Part 1

Part 1 of 3:

Writing Your Contract Addendum

1
Use a style that is consistent with the original contract. The addendum needs to look like the original contract so that it is clear the two documents are connected.^{[1]
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- Use the same typeface, margins and font size.
- Reference the date of the original contract.
- Title the document in a way that shows it is an addendum to the original contract. For example: "Addendum to January 2, 2009 Employment Contract".
2
Specify the parties to the contract.^{[2]
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- For example: This contract is between John Doe ("Employer") and Jane Smith ("Employee").
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3
Include the date upon which the addendum is to become effective.^{[3]
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- For example: "This addendum shall become effective as of today, May 5, 2010."
- Place the date in a way that is consistent with the original contract. If the original contract included the date at the beginning of the text, then follow the same format in the addendum.
4
List the terms and parts of the original contract that the addendum is modifying. Be clear, thorough and concise in describing the modifications. ^{[4]
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- Specify whether each item replaces a current item in the contract, changes one, or is a new item. For example: "Item I of the Employment Contract shall be modified as follows with the text in bold added to the Item and the text containing a strikethrough deleted:"
- Use strikethrough and italic or bold font to clarify additions, deletions, and modifications.
- Attach the original contract to the addendum and reference the fact that you have done so in your addendum. For example: "the original Employment Contract dated January 2, 2009 is attached and made a part of this document". This will ensure that any party executing the addendum is clear as to which specific contract the addendum modifies.
5
Add a signature block. The signature block should contain a blank space for the date the addendum will be executed, lines for each party to sign, and each party's typed or printed name.^{[5]
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6
Add a notary block. Each of the party’s signatures on a contract may be notarized in order to prove that he or she did, in fact, sign the contract.

Part 2

Part 2 of 3:

Understanding the Law

1
Make sure your addendum complies with the existing contract. For your addendum to be enforceable, it must comply with the terms of the existing contract. Often, a contract will specify the circumstances under which it can be amended. Therefore, it is imperative that you read the terms of the existing contract before preparing the addendum. Be particularly wary of contractual terms that:
- Prohibit addendums to the contract, especially with regard to altering specific rights or responsibilities.
- Allow one party to change the terms of the contract without the consent of the other parties involved.
- Set forth specific requirements for changing the existing contract, such as requiring that any amendment be made in writing and signed by all parties.
2
Review the applicable law. In addition to complying with the terms of the existing contract, your contract addendum must meet the requirements of the applicable law. The majority of contracts (i.e. employment agreements, leases, business agreements) are controlled by the common law of the state in which the agreement was made. Contracts for the sale of goods are governed by the Uniform Commercial Code (UCC).^{[6]
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- Under the common law of most states, a contract addendum is only enforceable if a right or asset of value (known as "consideration") is exchanged. Under the UCC, consideration is not required to make an addendum enforceable.
- Contracts governed by both the UCC and common law generally require mutual assent, meaning that all parties must agree to the important elements of the amended contract.
3
Consult an attorney. If you are unsure of whether your contract addendum complies with the terms of the existing contract and applicable law, you may want to consult with an attorney. This is particular true if the contract:
- Involves high stakes or a lot of money. ^{[7]
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- May require consideration to be enforceable, since what constitutes sufficient consideration varies depending on the circumstances of the contract and state law.
- Specifies rigorous requirements for modifying the contract and you are unsure how to meet them.

Part 3

Part 3 of 3:

Ensuring Your Addendum Is Enforceable

1
Agree to the essential terms of the addendum. Generally, unless the terms of the contract specify otherwise, a valid addendum requires mutual assent. This means that all parties must fully understand and agree to the important elements of the addendum. If any of the parties do not understand or agree to an essential term of the addendum, it will not be enforceable.
- Before preparing the addendum, discuss the changes you want to make with the other parties. Make sure everyone understands and agrees to their new rights and obligations under the addendum.
- Once you have a draft of the addendum, send it to the other parties for their review. Do not sign the addendum until everyone has reached an agreement regarding the essential terms.
2
Obtain signatures of all parties who signed the original contract. Generally, unless the terms of the contract specify otherwise, a valid addendum requires the signature of all parties who signed the original contract. This provides evidence that all parties agreed to the addendum, though for the agreement to be enforceable, all parties must also understand what they are signing.
- If one of the parties who signed the original contract is not available, an agent can sign in his place. For an agent's signature to be sufficient, the original signatory must have expressly granted the agent the authority to sign contracts on his behalf.
3
Exchange an additional promise or asset. In most cases, an addendum requires an additional exchange of "consideration" to be enforceable. This does not usually apply to contracts for the exchange of goods, since these are governed by the Uniform Commercial Code (UCC).
- Consideration is a benefit that each party expects to get from the contract. For example, if you rent an apartment, you receive the benefit of using the apartment and the landlord receives the benefit of your paying him rent. ^{[8]
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- Employment agreements, leases, business agreements are contracts that may require additional consideration for an addendum to be binding.
- Consider consulting an attorney if you believe consideration may be required, since what constitutes sufficient consideration varies depending on the circumstances of the contract and state law.

References

Warnings

Real estate law in your state may require that the parties execute an amendment instead of an addendum to a purchase contract in some circumstances. You should consult with an attorney to determine whether your specific situation requires an amendment or an addendum.

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