What is the difference between a contract amendment and a contract addendum?

A contract amendment and a contract addendum serve distinct purposes within the context of contract management. An amendment modifies existing terms of a contract, making alterations to specific clauses or conditions that are already set. This process is typically formalized, and both parties must agree to the changes, ensuring that the revised terms reflect the new intentions of the agreement.

In contrast, a contract addendum is used to introduce entirely new terms or conditions that were not part of the original contract. It supplements the original agreement without changing the existing terms, effectively adding additional information or stipulations that both parties agree to incorporate.

The distinction outlined in the correct answer highlights the fundamental difference between these two instruments: an amendment specifically alters what is already there, while an addendum expands the agreement's scope by adding new elements. Understanding this difference is critical for anyone involved in contract administration, as it informs how adjustments to contracts should be documented and the legal implications of those changes.