What is an Addendum?
Definition: An addendum is an additional piece of information added to a given document. It is a supplementary section added after the original text is done.
An addendum or appendix, in general, is an addition required to be made to a document by its author subsequent to its printing or publication. It comes from the Latin gerundive addendum, plural addenda, “that which is to be added,” from addere (lit. ’give toward’).
An addendum is a document or information attached or added to clarify, modify, or support the information in the original document or written work. In construction industry, for example, an addendum issued by a client during the bidding process becomes part of the contract documents when the contract is awarded.
What Does Addendum Mean?
The term is mostly employed in the legal field to describe a portion of new clauses or text being added to a legal document in order to modify its previous information. This new additions can change the document’s purpose and nature substantially and they can also modify its reach and impact on the parties involved.
This is the reason why addendums, in order to be considered valid, need to be signed by each party to declare their acceptance of the new information being added to the document. This means that addendums are normally drafted after an initial document is already signed.
The addendum, then, must be attached to the original piece for the parties to understand the final purpose and reach of the document. Addendums have been used in occasions for fraudulent purposes. Given the misleading nature of having a document that changes a previous one, the contract’s trace can be lost and the contractual relationship can change its nature without one of the parties noticing the change.
A company called Lovely Views LLC. provides apartment space for rent to individuals and corporations. The company is currently leasing a 100mt2 apartment in the downtown area of a big city in the U.S.
Mr. Gonzalez is interested in this apartment to move into the city and he contacted Lovely Views to see the apartment. After he saw it he said to be happy with the offer and willing to sign for it. The company drafted the lease agreement and explained Mr. Gonzalez everything he needed to know about the contract and the property.
A few days later, the company’s representative called Mr. Gonzalez to tell him that he needed to sign an addendum where all the inventory that is inside the apartment is described, in order to declare that he has received this equipments in good shape and must return them in the same condition when the contract is due. This would be an example of an addendum, since it would be an additional piece of information written and added to the original document which, in this case, would be the lease agreement.
An addendum may explain inconsistencies or expand the existing work or otherwise explain or update the information found in the main work, especially if any such problems were detected too late to correct the main work. For example, the main work could have had already been printed and the cost of destroying the batch and reprinting it deemed too high. As such, addenda may come in many forms—a separate letter included with the work, text files on a digital medium, or any similar carrier. It may serve to notify the reader of errors present, as errata.
In contracts and other legal documents
In other documents, most importantly in legal contracts, an addendum is an additional document not included in the main part of the contract. It is an ad hoc item, usually compiled and executed after the main document, which contains additional terms, obligations or information. An Additional Agreement to a contract is often an addendum to a contract and is simply referred to as being an extension or addition to a main contract. In todays business world additional authorisation subjects such as company seals are not usually required unless stipulated in the original agreement.
It is to be distinguished from other appendices to a contract which may contain additional terms, specifications, provisions, standard forms or other information which have been separated out from the main body of the contract. These are called: an appendix (general term), an annex (which includes information, usually large texts or tables, which are independent stand-alone works which have been included in the contract, such as a tax table, or a large excerpt from a book), or an exhibit (often used in court cases),
Similarly an attachment is used usually for e-mails, while an enclosure is used with a paper letter.
Addenda are often used in standard form contracts to make changes or add specific detail. For example, an addendum might be added to a contract to change a date or add details as to delivery of goods or pricing. The addendum should be referenced in the contract, or the contract should be referenced in the addendum, so that it is clear which contract the addendum is modifying.
A rider is often used to add specific detail and especially specific conditions to a standard contract such as an insurance contract. A rider may also be added to a piece of legislation.
Schedules and exhibits are sub-categories of addenda, with schedules being related to numerical and time information, such as pricing and time-schedules, and exhibits used for examples of standard forms or additional information necessary for the parties to understand and/or comply with their contractual obligations. Outside of contract law, exhibits are often used in legal documents filed with a court as part of judicial proceedings such as motions, briefs and the submission of different types of evidence for inclusion in the record of trial of a particular case.
In legal judgments
Juries in inquests or trials may amplify or explain their decisions by issuing a commentary known as a rider, as in the prosecution of Harold Greenwood and the inquest of Jean Charles de Menezes.
In medical transcription
Addendum is also used if the medical care staff is inserting additional information about the patient.
The addendum is the radial distance from the pitch circle of a cogwheel, worm wheel, etc., to the crests of the teeth or ridges. This is also the radial height of a tooth above the pitch circle.
Examples of Addendums in Use
Real estate transactions will use addendums to modify an original lease or purchase agreement. Usually, an addendum is attached to the signed lease or purchase agreement and describes financing terms and property inspection requirements.
Addendums are in frequent use within the real estate market. As a potential homebuyer and seller negotiate an agreement, often referred to as the purchase and sale agreement, addendums provide information regarding issues and items not contained in the original draft. Addendums define information relevant when using contingencies, such as one relating to the buyer’s ability to obtain proper financing or a real estate-owned (REO) home sold as-is.
Addendums and Amendments
When an addendum alters a previously signed arrangement, it is known as an amendment. While both addendums and amendments provide for changes to already created documents, addendums are added to works in progress or contracts that are in the development phase and have not yet been executed. In contrast, amendments are used for documents that were previously considered complete, fully agreed upon by all parties, and executed in their original form.
Amendments are frequent in construction contracts. Their function is to make contract changes without having to rewrite an entire contract. As an example, a company may contract to construct a new building, but as they begin to dig the footers, they find the underlying soil to be substandard and needing reinforcement. An addendum is useful to add the requirement to reinforce the soil without the need to recreate a new contract.