Addendum vs Amendment

Addendum vs Amendment

Amendment is a word that has become very common in our daily lives as we keep hearing of constitutional amendments, amendments made in text books, and even policies of an organization. Amendment pertains to improvement in a text, a document, legislation, or a policy by introducing changes. There is another word addendum that confuses many when they see that being used. Though there are many similarities between amendment and addendum, there are subtle differences also that necessitate their correct usage as they cannot be used interchangeably. This article attempts to highlight these differences between the two similar meaning words that are used very often in real estate business.

Addendum

An addendum is a text that is added to the original text as it got omitted from the draft by mistake or by purpose. Addendums are seen commonly in the case of text books where authors issue these texts that get added in subsequent revisions or reprints. In the case of real estate contract, an addendum is a point or a rule that was not a part of the original document but was added on the insistence of the buyer. For example, if the buyer is satisfied with the property and price but wants to open an office inside, he can get this point added to the agreement making the contract subject to clarification of the doubt that he is allowed to use the premises for commercial purposes. If there is a neighbor making a fencing that can be treated as encroachment in the property, the buyer can get another point added to the effect of getting the property free from encroachments before agreeing to the contract. Thus, it can be termed as an explanation or information about the issues raised by buyer or seller before the signing of the contract. An addendum is always a part of the contract.

Amendment

Amendment is a correction of an error in a document pointed out by the buyer or seller in the case of a real estate contract. An amendment may be because of a legal provision or it may be because of a factual error in the document. Typing errors are also corrected by introducing amendments in documents.

Amendments are seen commonly in communication, in the corporate world where changes can be made in a document any number of times. An amendment to a real estate contract is acceptable only when it is signed by parties that are part of the original contract.

What is the difference between Addendum and Amendment?

• Changes effected in the original contract are referred to as amendments whereas additions in the original document are termed as addendums.

• If something got omitted by mistake and added later on, it is mentioned as an addendum.

• Amendments are more common in corporate communication while addendums are seen more commonly in the literary world.

• Addendums are treated as part of the contract in real estate transactions whereas amendments are a part of the contract only till it is signed.