Contract Addendum vs. Attachment

Instructor: Tisha Collins Batis

Tisha is a licensed real estate agent in Texas. She holds bachelor's in legal studies and a master's degree in criminal justice.

Contracts contain multiple parts that can be confusing for any individual that is not well-versed in the subject. This lesson will define contract addendum and contract attachment, providing the reader with a comparison of the two.

Contract Addenda and Contract Attachments: Aren't They the Same Thing?

Teresa and Jay are having a new home built in Texas. They hired an amazing real estate agent to help them, and she brought them some paperwork to sign. It included the contract for the purchase of the new home, an addendum, and an attachment. Their agent explained everything to them, but they didn't understand why they had to sign so many different things. She did tell them that the contract would be legally binding on all the parties, which made them a little nervous. Wasn't the contract itself enough? Essentially, no. It is not enough.

When Teresa and Jay sat down and read all of the paperwork later that night, they realized each form their real estate agent provided to them had its own purpose. The contract itself covered things like how much their home would cost, where it would be located, and what the seller would pay for in the transaction. The addendum was another form that, in their case, said that they already had a house to sell before they could complete the purchase of the new house. It even said that if the sale of their current home fell through, they could back out of the contract on the new house. Finally, the attachment was labeled Exhibit A and stated everything that the builder would provide for the sales price.

Teresa and Jay had to initial and sign several different places in each of the forms. They noticed that the last page of their sales contract listed everything that went with the contract. The addendum saying that they had to sell their own home was written in, along with the attachment that was named Exhibit A. They realized that their real estate agent seemed to know what she was doing and had covered every possible angle of their contract for them. Although they didn't fully understand why there were so many different forms, they were confident that they were signing everything they should.

A contract can be legally binding on all parties

Contract Addendum

A contract addendum is an addition to a contract. In Teresa and Jay's case, it was an addition to the sales contract for their new home. The addendum becomes part of the original contract and should only discuss the specific part of the contract that will be different, or in addition to, the original contract. For example, not everyone has to sell an existing home before they can purchase a new one. In Teresa and Jay's case, they had an existing home so this was addressed by adding the addendum for the sale of their home. One important thing about an addendum is that everyone that is a party to the contract must also agree to what is on the addendum. This is evidenced by their signatures and/or initials on the addendum.

Contract Attachment

A contract attachment is different from a contract addendum. A contract attachment is also placed with the contract, but it doesn't change anything about the contract. In Teresa and Jay's case, it was an exhibit that was attached to their contract. An attachment can also be an appendix or an annex. An appendix is typically supplemental material that is added to a contract while an annex is a term that isn't used as frequently. An annex is also something that is attached to a contract.

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