Contracts are complex and can be difficult to understand, but they are necessary to do business. In this article, we’ll try to make contracts less intimidating by explaining several common documents that are attached to or related to contracts.
An amendment means making a change to a contract that already exists. Amendments do not replace the entire contract, just the sections that have been modified. If one party wants to change a term or a few terms of a contract, they can amend those terms instead of creating a whole new contract. Sometimes it may be better to create a new contract instead of an amendment, for example, if you want to change a bulk of the contract. It’s important to note that amendments to contracts must be in writing – verbal agreements are not sufficient to amend a written contract.
Schedules are sometimes referred to as appendices, but they are different. In contracts, schedules are included at the end of the document to incorporate information and terms that are part of the contract. Certain terms belong in a schedule rather than in the contract if they are very complex or detailed. These terms usually take the form of charts, lists and long descriptions. Some examples of information to include in a schedule are detailed warranties in Share Purchase Agreements and lists of fees for services in Independent Contractor Agreements.
An appendix is a document attached to the end of a contract that contains detailed information, like a schedule. But, the difference is that appendices contain supplementary information that is not included in the contract. Appendices are used to elaborate on or clarify certain terms or information in the contract but they do not include terms that are part of the contract. Appendices are more often used in reports than in contracts.
An exhibit is another type of document that can be attached to the end of a contract. Like an appendix, an exhibit is not part of the contract. However, exhibits are necessary to supplement certain terms of a contract. For example, an ancillary agreement such as a stockholder’s agreement can be attached to a contract as an exhibit. Exhibits can also be attached to contracts as boilerplate documents such as tax forms and benefits forms in employment contracts.
An addendum is a document that adds new terms or obligations to an existing contract without changing the other terms of the contract. An addendum becomes part of the contract and will be enforced. An example of an addendum to a contract is if your job description changes and some new tasks need to be added to the responsibilities section in the contract.
If you need help drafting a new contract or making changes to an old contract, we recommend contacting a lawyer to ensure it’s done properly.
