What Is the Difference between a Supplemental Agreement and a Bilateral Modification

When it comes to contracts, there are different terms and phrases that can be used to refer to changes made to the original agreement. Two terms that are frequently used are supplemental agreements and bilateral modifications. While these terms may seem similar, there are some key differences that set them apart.

Supplemental agreements, also known as addenda, are documents that are added to the original contract in order to provide additional terms or clauses. These terms may have been omitted from the original agreement, or they may have been added later on as a result of negotiations between the parties involved. A supplemental agreement can be used to clarify or expand upon the terms in the original contract, or to address issues that were not covered in the original document. In essence, a supplemental agreement is used to supplement the original contract, hence its name.

On the other hand, bilateral modifications refer to changes made to the original contract by mutual agreement between the parties. Bilateral modifications are changes to the terms of the deal that require the agreement of both parties. This can include changes to pricing, delivery schedules, or any other terms that were originally agreed upon. Bilateral modifications require both parties to agree to the changes made, and are often used in long-term agreements where the parties need the flexibility to adjust the terms over time.

So what sets these two terms apart? While they may seem similar, the key difference between a supplemental agreement and a bilateral modification lies in who initiates the change. A supplemental agreement is typically initiated by one party, and is used to add additional terms or clauses to the original contract. On the other hand, bilateral modifications require the agreement of both parties, meaning that the changes are initiated by mutual agreement between the parties.

In summary, a supplemental agreement is used to supplement the original contract by adding additional terms or clauses, while bilateral modifications are changes to the original contract that require the agreement of both parties. Understanding these differences can help ensure that contracts are properly modified and updated over time, and can help avoid any misunderstandings or disputes that may arise as a result of ambiguous language or contract terms.