A contract extension agreement is a legally binding document that extends the timeframe of an existing contract. The agreement includes the identity of the parties, the obligations of the parties, terms, conditions, and the extension period. Create a contract extension agreement template in just a few simple clicks: edit to reflect your circumstances, download, print, and use.
A contract extension agreement is a legally binding arrangement between parties of an existing contract seeking to extend its end date. It extends the terms and conditions of an existing contract and can be used to extend lease agreements, employment, service, or sale of goods contracts.
Contract extension means that an existing contract is continued for a certain period. This will be exercised through the extension options in the contract upon mutual agreement of the parties.
The parties in an extension letter for a contract should be the same ones in the original document, and they include:
To fully utilize a general contract extension agreement template, you’ll need to understand the complex terms used in drafting the document, which include the following:
Please note this list is not exhaustive since terminologies vary depending on the project, industry, and parties.
All that is required for extension is a pdf contract extension agreement template. This is an amendment to the existing contract as long as both parties are willing to extend it.
Rather than writing a whole new contract for extending the existing contract, parties can just specify their desire to extend the existing contract. This should include the following:
Names and addresses of both contracting parties;
Existing contract title;
Existing contract start and end dates;
Contract extension period end date (e.g., when the extension ends);
Terms that have been added or changed (i.e., an additional purchase of materials);
As with any contract, parties are legally bound by the addition of this agreement they create and sign.
Here are the steps on how to write a contract extension agreement example for both parties.
Once you have agreed with the counterparty on the importance of extending the contract, make the contract extension agreement form according to the following steps:
Review the current contract –– Review the original contract to refresh your memory on the terms of engagement you and the counterparty had settled on.
Highlight and document reasons for the extension –– Identify why you want the parties to extend the contract period and what modifications need to be made to the original contract.
Indicate the extension period –– Indicate the new timeframe for the contract.
Have an effective date –– The agreement should have a date when it takes effect.
Think through termination provisions –– In this section, you’ll need to consider the circumstances that may trigger the termination of the contract. For instance, you could provide that the termination clause will take effect if either party fails to fulfill critical obligations.
Consult an attorney –– You may consider consulting an attorney in your process to ensure that the extension agreement will mutually benefit all parties.
Fill out your details, review, and sign –– Once you have covered all the above, review the document and sign.
Another reason for termination could be convenience. One party doesn't need to make a mistake to trigger termination. You could give the option of either party terminating the contract at any time with sufficient notice. Lastly, you could also indicate that the contract self-terminates upon the lapse of the extended period.
The party receiving the contract extension agreement example should:
Review the documents –– Read through both the original and the extended contract agreements and assess the potential benefits and risks of the extension.
Consult an attorney –– Speak to an attorney regarding any potential risks and benefits of the extension.
Fill out your details, review, and sign –– Once confident that the agreement will further your business interest, download the printable document as is and sign.
In many instances, the terms of the contract being renewed remain the same. Many contracts contain an automatic renewal clause which provides that the existing contract will automatically be renewed for a period specified in the contract, unless one party provides notice to the other of the intent to terminate the contract upon its scheduled termination. Usually, a contract provides the method and timing required to provide the respective notice to the other party.
Legal entities with a written and signed contract agreement may need to extend its term if it expires before either party completely fulfills their obligations.
Upon or before expiration of the term of the contract the parties of the contract may:
A contract extension agreement form extends the term of a contract. Examples of when to use the agreement may include:
In summary, you will need a contract extension agreement template whenever you seek to lengthen the time to perform a contractual obligation.
There are instances when it is not reasonable to have a contract extension agreement form between parties. Some of these include:
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In many ways, contract extensions and renewals are similar because they allow you to continue your relationship with the other party. However, a contract extension agreement form extends the contract's term based on its existing terms, whereas a contract renewal replaces the existing contract with a new one.
The term “contract renewal” refers to an extension of a contract without any change in its terms. It is used when the other party does not change the nature or scope of its services. When your company has provided accounting services for many years, it makes sense to renew the current contract. Changing the nature of your services will require a contract renewal rather than an extension.
A contract that has expired cannot be extended; instead, a new one must be created since the old one does not exist any longer.
Your contract extension agreement may need to be witnessed or notarized, depending on the terms. This is to minimize future disputes. Consult with an attorney if you need help drafting contract extension agreement templates that meet your needs if your agreement is complicated.