The Supplemental Agreements Primer: Need To Knows And Uses
What is a Supplemental Agreement
A supplemental agreement is an addendum or appendix to a primary contract. Its purpose usually is to clarify, amend, or provide additional detail for provisions within the parent agreement.
Supplemental agreements are usually drafted and executed separately after the original contract is in place. Depending on the circumstances, a supplemental agreement can consist of a single Page that contains new or modified provisions or even multiple pages outlining additional details, such as timeline, payment, scope of work, or other contract clarifications. A supplemental agreement can incorporate language that indicates it only supplements the parent agreement. For example, one could use the following language in a supplemental agreement: ‘This supplemental agreement supplements the [Name of Parent Agreement] entered into between [Name 1] and [Name 2] on [Date] . "
Common purposes of a supplemental agreement include:
Clarifying provisions of the parent agreement
Addressing ambiguity
Providing additional details
Updating incorrect information
Extending the term of the parent contract
Oral agreements entered into verbally between contracting parties also can be supplemented in writing with a supplemental agreement.
In real estate transactions, supplemental agreements are used for a wide variety of reasons, including adding contingency clauses or financing conditions to the parent agreement. If a supplemental agreement modifies the price of the property, it should be executed by both parties. Any amendments that merely extend the closing date are often referred to as "amendments."