I was recently reviewing an AIA A121 contract—the standard form agreement between an owner and construction manager. The form AIA document had very few changes, but the parties had attached an addendum adding to and altering the language of the form contract. While addendums can be a great idea, this addendum referenced sections of the contract that didn’t exist in the form and could create some real enforcement difficulties.
Let me first say that an addendum is a great idea. It can be used as a tool to consistently alter form contract language. If there are issues that you have with a particular form contract, an addendum, once first drafted, may provide you with an easy way to incorporate the language you need into the contract.
But, you also need to make sure that the underlying contract and addendum match-up. If your addendum was originally drafted to address language in a particular form contract, do not assume you can simply add it to future contracts. For example, if your addendum seeks to augment existing language in the form contract, make darn sure the form you are using contains the original language now sought to be augmented. If the form contract doesn’t contain that paragraph, what, if anything, is being changed? And, will the court refuse to enforce the paragraph in the addendum if the original contract doesn’t have the paragraph sought to be augmented?
The same is true for those addendums that seek to revise or replace certain paragraphs in the original form contract. If the original form contract doesn’t have these paragraphs, they certainly can’t be revised or replaced. And, again, how will the court interpret the addendum?
It is always important to read your construction contracts. And make sure that the addendum you drafted for one form contract is truly applicable to the contract you are reviewing today.