Wednesday, June 29, 2011

Amendments versus Addendums

In a recent forum an individual asked the difference between amendments and addendums.
When there is a contract that is in existence when you change it, you amend the agreement.  A contract amendment is a bi-lateral agreement to change the agreement. There can be several types of addendums. The first type of addendum is when you need to change a request for bid or request for proposals. That type of addendum is unilateral and does not require agreement by the parties. You could also have addendums included in the agreement when it is signed. Since the agreement requires mutual agreement the inclusion of those addendums requires mutual agreement.

Why would you include addendums in the agreement? 

If you use the bid or proposal requests to establish the scope of work and specifications and you have issued addendums during the process, you have two ways to identify the final scope of work or final specifications. You could re-write the initial documents to incorporate all the changes or additions that were made by the addendums. If you have the time, that is the cleanest approach.  The alternative is to include the original bid or request for proposal document and all addendums that were issued as attachments to the contract.  To eliminate conflicts between the documents you then need to establish the priority between the addendums and the original document they changed. This approach is not the cleanest approach but it’s the fastest as it avoids having to do the re-write.

For example if you had a Request for Proposals dated July 1, 2011 and issued
Addendum 1 on July 10, 2011 and Addendum 2 on July 20,2011, the order of precedence would be:
First to Addendum 2 dated July 20, 2011
Then to Addendum 1 dated July 10, 2011 and
Finally the Request for Proposals Dated July 1, 2011

That would establish the priority between those documents and your agreement also needs to address the priority between those documents and the agreement and other documents that are incorporated into the agreement.

1 comment:

  1. You explain the difference between the two rather well. I always refer to this blog for clarification.