What does an addendum in contract management do?

An addendum in contract management is a critical document that modifies, adds to, or clarifies existing contract terms. It acts as an extension or modification to the original contract rather than replacing it or establishing a new agreement. This allows parties to address changes in circumstances, incorporate new terms, or clarify vague or ambiguous language without the need to create an entirely new contract.

For instance, if two parties find that certain conditions have changed, or they wish to add specific clauses related to performance expectations or pricing adjustments, an addendum provides the flexibility to do so while still maintaining the original contract's validity. This ensures that all parties remain aligned on the terms without needing to renegotiate the entire agreement, thereby preserving the original deal's structure while accommodating necessary changes.