Addendum

Definition

An addendum is a separate instrument signed by the parties that modifies, clarifies or extends terms of an existing contract while leaving the rest intact. It is the standard way to change agreed terms during the contract term, for instance to adjust pricing, scope or duration. To be effective it should reference the original contract and be signed by authorised signatories of both parties.

Example

Mid-term, the parties sign an addendum raising the annual fee by 4% and extending the term by one year, leaving all other clauses unchanged.

Why this is a business risk

An addendum that is poorly drafted or not signed by authorised signatories may fail to legally amend the underlying contract, meaning the original terms continue to apply. If addenda accumulate without a clear version history, it becomes difficult to know which version of a clause is currently in force. Relying on informal email exchanges rather than a signed addendum leaves agreed changes legally precarious.

How to manage it

• Every amendment should be captured in a signed addendum that references the original contract by name and date.
• Clearly state which clauses are replaced, added or deleted, and reproduce the new wording in full to avoid ambiguity.
• Number addenda sequentially so the version history is transparent and the latest state of each clause can be reconstructed.
• Store each addendum alongside the original contract in your repository so both are always retrieved together.