contract-law
When and how does an addendum apply?
<p>I know in some contracts it specifically states "this contract can only be modified in writing by an addendum". I've read this is redundant as it's always true. I've also seen explicit terms in addenda saying things like "this addendum takes precedence, supersedes or prevails over any conflicts, contradictions or inconsistencies with the contract". Is this necessary? Isn't this type of statement redundant too as that's the whole point of an addendum?</p>

<p>Is there a natural limit to an addendum, for example is a new contract ever required? For example say the initial contract says "Joe will pay Sam $100 each month" but then the addendum says "Joe will pay Robert $200 bi-monthly". Is this the point of having the clause about supersede/precedents?</p>

<p>Basically what I'm asking is, are there any rules for addenda, for example can they both add to, remove from and modify the original contract?</p>

<blockquote>
  <p>"this contract can only be modified in writing by an addendum". I've
  read this is redundant as it's always true.</p>
</blockquote>

<p>The intent of a clause like this is to prohibit an oral modification of the contract, for example, by a salesman, from having legal effect. In Colorado, where I live and practice law, those terms are void unless the contract is of a type that has to be in writing to be valid.</p>

<p>The default rule, in absence of such a term, would be that a contract may be modified in writing or orally or through the course of dealings of the parties.</p>

<blockquote>
  <p>I've also seen explicit terms in addenda saying things like "this 
  addendum takes precedence, supersedes or prevails over and conflicts,
  contradictions or inconsistencies with the contract". Is this
  necessary? Isn't this type of statement redundant too as that's the
  whole point of an addendum?</p>
</blockquote>

<p>Usually, this is probably overkill, but sometimes it isn't obvious on the face of two documents which one is the original contract and which is the addendum, or which addendum was added first. It certainly doesn't hurt to have a provision like that. </p>

<p>Also, sometimes the base contract would be written by the head office of a corporation, while the addendum would be written by local sales staff. A term like this clarifies that the local sales staff has the authority to override a term put in by the corporate headquarters.</p>

<blockquote>
  <p>Is there a natural limit to an addendum, for example is a new contract
  ever required? For example say the initial contract says "Joe will pay
  Sam $100 each month" but then the addendum says "Joe will pay Robert
  $200 bi-monthly". Is this the point of having the clause about
  supersede/precedents?</p>
  
  <p>Basically what I'm asking is, are there any rules for addenda, for
  example can they both add to, remove from and modify the original
  contract?</p>
</blockquote>

<p>As a general rule, there is no limit to the extent that a contract may be amended. An amendment so extreme that it completely replaces a previous contract, such as the example you give, is called a "<a href="https://en.wikipedia.org/wiki/Novation" rel="nofollow noreferrer">novation</a>".</p>

<p>There are times when there could be a difference between a new contract and an amendment which generally involve taxation or government regulation.</p>

<p>For example, many places impose taxes on a per rental basis on rental car agreements. An amendment to a car rental contract, for example, to add insurance or to allow you to upgrade your original deal to get a nicer vehicle, normally wouldn't incur a new rental car tax. But, removing the original person renting the vehicle from the contract and replacing that person with someone else probably would constitute a new contract and trigger a new rental car tax.</p>

<p>Similarly, in New York City and a handful of other places in the United States in the Northeast Corridor, there are rent controlled apartments. Some amendments of a lease to a rent controlled apartment, for example, a change to allow a tenant to make certain renovations without seeking landlord approval, probably wouldn't constitute a new lease that allows the landlord to change the rent. But, a change in the person who would be the tenant – even if done in the form of an amendment to the lease – or a change in the unit covered by the lease, would probably constitute a new lease for the purpose of the rent control laws and allow the landlord to increase the rent.</p>

<p>As a third example, in Colorado, all major contracts with a public utility must be approved by the public utility commission (PUC), but amendments to contracts that have already been approved don't need PUC approval. But, the courts have held that a material change to the core provisions of a contract, even if done in the form of an amendment rather than a new contract, counts as a new contract.</p>

<p>As these examples illustrate, the boundary between what can count as an amendment and what constitutes a new contract for regulatory or tax purposes has to be evaluated based upon the context of that particular regulatory or tax system and doesn't have a uniform legal definition.</p>
