There are times when there might be changes required for a contract. Therefore, you need to have a contract addendum. These are post-contract attachments designed to change the pre-existing contract. Once all parties involved are in agreement on the contract addendum, then it becomes part of the new contract and is legally binding.
There are numerous reasons why a new contract might be required, such as a change in the project's scope or because there is now more work to do, or a change to a previously agreed upon deadline. In this article, we will explore the reasons in more detail, how to write a contract addendum, and some of the tips to make it work. In addition, we will detail how Indy can help you write an addendum to a contract.
Understand the Existing Contract
First, you need to make sure you understand the existing contract. Read through it carefully and make notes of sections that are parts of the existing agreement that are no longer relevant to the work being carried out.
You might find, for example, that they no longer use a social media platform or a piece of software and you don't need to provide access to that or use it. Or perhaps they've shifted their focus.
However, you need to understand the original contract to know what needs to be changed to ensure it is more relevant to the current circumstances of the work that you do.
When you come across a clause or area that needs to be amended, highlight it or note it down.
Consulting with Contract Law Experts
Remember that you're going to be changing a legally binding contract. So when you start amending agreement clauses, speak to a professional legal expert. They will have the experience to tell you what is necessary and what is not necessary when making changes.
For instance, they might point out there are some clauses in the contract that require you or the client to pay a fee for the change. You will probably want to avoid changing those if you don't have to.
If you do make changes that are against the policy or the legally binding terms of the contract, you might find you can end up in court for breach of the contract. One thing to look out for is when there is a term that states you need to wait so long before changing the contract. Or that you need permission from certain key stakeholders to make any changes to your contract.
Preparing to Write the Contract Amendment
When it comes to changing the original contract and making a contract addendum, you need to follow a clear and logical route and steps. Consider these aspects before you write anything about employment agreements that you currently have with a client.
Collect information and documents needed to write a contract addendum
Before you start anything, ensure you have all the information and documents required to ensure you're making the best case for making a change to the original contract. For example, if you've got an email from the client saying they would like to change part of the job role you have, have the email on hand so you can reference it.
In addition, you should have the original contract at hand so you can reference it in the contract addendum.
Decide on the format and structure of your contract addendums
You must consider how you're going to structure your contract addendum when you write it. When you start a contract amendment, you need to be sure that you're sticking to the same format, style, and tone you had in the original contract.
So if you had a contract that looked like an employment contract, then you should have a contract addendum that looks exactly like an employment contract. Making any contract amendment look like the existing agreement stops confusion. Everyone knows the two documents are related.
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Writing the Addendum to a Contract
Here are the sections you need to include when you start amending agreements.
Title and introduction
The first thing you should write is a title and an introduction. The title should read something like "Amending Agreement" and then reference the original contract name. This can be relatively short.
It is also a good idea to include a date on the document.
Reference to the original contract
Now you need to include a reference to the original contract. You should reference the sections of the existing contract you're looking to change. For instance, if the client is looking for increased hours, you can state that in the existing contract, the hours of work were stated as being so much.
You might also want to reference who the original agreement was signed by.
A detailed description of the changes or additions
Now you need to have a detailed description of the changes, additions, and what is being removed from the contract. There is no reason to have a lengthy discussion about what is going to be changed. All that you need to do is to ensure it is clear and concise what the new terms of the contract are going to be.
Remember that once the contract addendum has been signed by all parties involved, then it becomes legally binding. If there is room for interpretation, this could go against you in the future. If you're in doubt, seek expert advice from a law firm or another legal expert.
Clarity on how the addendum impacts the rest of the contract
Once you've done this, you need to clarify how the contract addendum will impact the rest of the contract. For instance, if the contract states that your hours are to be increased, you should state there will be an adjustment to the monthly retainer you're due to be paid.
You might need to check carefully how the contract addendum will impact the rest of the existing contract.
You must add a closing statement to the document. This should detail what has been changed, who has to agree to the changes, and when the effective date is. Remember to check the date format. If you're a USA freelancer working with a UK company, remember that both write down the dates differently. So while you might think you said the date is from the 6th of May, they might think the effective date is from June 5th.
Reviewing the Contract Addendum
Before you forward the contract addendum to your client, read it two or three times. Be sure that you're checking the changes you've made to the contract for accuracy and completeness. The last thing you want is to have a loophole where a client can claim against you.
You can use editing software for proofreading your contract addendum. Or you can ask a law firm to check the agreement. Sometimes they will charge a small fee to check that everything is there.
Another thing you might want to do is to set aside the contract addendum for a few hours and then come back to it after doing some other tasks. Having a refresh might give you new insights into the contract amendment document.
Getting the Addendum Signed by All Parties Involved
Any contract amendment needs to be signed to demonstrate that all parties agree to the changes. In the contract addendum, there should be a signature block that both you and your client can sign.
The addendum to a contract should be signed by the manager, you, and ideally a witness. A witness can confirm that the contract amendments were agreed upon by everyone and the contract addendum is a valid contract.
Storing the Addendum as a Separate Document
When you have the addendum signed, you need to keep a copy of the document as well as the original agreement. It is best to keep the contract addendum document attached to the original contract. You might want to put it at the front of the original agreement, so people don't read the old contract before the changes that were made.
If you separate the documents, then what can happen is someone picks up the old document, and then applies those terms to the business. If an old contact leaves your client and a new one comes aboard to manage the job, this is when you are most likely to face a problem such as this.
Common Mistakes to Avoid When Changing the Original Contract
Numerous mistakes can happen when you are amending the agreement that you've already made.
One of the most common mistakes is to make amendments to an agreement that has already expired. There is an easy solution to avoid this problem—check that the initial contract is still valid. There might be an expiration date on the contract, for instance.
You also might need to check that you can make the changes you want to make. Changing the party responsible in the initial contract, for example, cannot be legally done in a contract addendum.
There might also be restrictions that determine what can and cannot be changed, and when changes can be made. Be sure any amendments fall into these categories.
Try Indy to Manage Your Legally Binding Contracts
Managing your contracts can be a lengthy process. You want to make sure any contract you use is a legal document. And when there are changes needed to a contract, you want to get the best protection and outcome. Indy can help you with any document related to your freelancing career. It can help you to create a contract addendum and have the initial conversation with clients about the change to the agreement. Then you can store all the contracts on Indy's file system to ensure there are no lost documents. In addition, you can get access to the following:
- Nine tools all in one place that can help you to build an effective workflow from the initial contact with the client to when you get paid.
- A CRM system that allows you to keep the contact details of all those important people in your client's organization.
- A file storage that allows you to save the initial contract, any contract amendments, and other legal documents that you want.
- Templates to help you write contracts, invoices, and emails.
Indy provides a unified platform to keep all aspects of a freelance business organized. And you can succeed with your business with ease thanks to their tools designed especially for freelancers, so why don’t you give it a try for free.
Not all contracts will remain the same forever. There are going to be times when you might need to make changes to your contract. Writing a contract addendum is an important skill, and while you might need to consult legal representatives, it is also important to understand the process yourself.
And you can get help with understanding and implementing contract changes with the help of Indy. Try them out for free, and use them to manage up to three contracts a month. Or get unlimited access for a low monthly fee.