As you and your partners near the end of the term of your partnership agreement, it can be quite a hectic time as you all work furiously to fulfill your obligations under the agreement before the partnership terminates.
If it seems as if an extension of time would be useful, it may be a good time to consider entering into a contract extension agreement.
Extending, rather than renewing, your partnership agreement
The process of renewing a contract is not difficult to initiate. You can begin the process with a basic contract renewal letter. However, unlike a contract extension agreement, renewing a contract generally means you are replacing the old contract with a new contract. Because of this, extra time may be required to make sure the new contract covers everything you need to be covered, and you may want to consult with an attorney.
When it comes to an agreement to extend a contract, on the other hand, you and your partners are effectively agreeing to extend the terms of your existing partnership agreement for a set period of time. This means that the main point of discussion and negotiation is the period of time for which you wish to extend the contract. So long as you are all in agreement that the contract should be extended with all its existing terms intact, entering into a contract extension agreement will be more straightforward—and time-efficient—than opting to renew the entire contract.
Choosing to extend your agreement
There are a number of reasons to consider extending your partnership. You may have come together to work on a specific project that has a clear completion date, and it has become obvious that all parties need additional time to fulfill their obligations.
Or perhaps you and your partners find the current partnership to be thriving beyond your initial expectations, and you would all like to continue working together under the terms of the original agreement.
In such cases, taking the time to come to an agreement to extend the contract makes a lot of sense. With a contract extension agreement, the main decision you and your partners have to make is how long you wish to extend your business arrangement. With the extension agreement in place, there is less likelihood of there being confusion or misunderstanding regarding the terms of your contract, as the agreement simply extends the time for you to fulfill the initial contract terms.
Drafting a contract extension agreement
Your partnership agreement likely contains an option to extend the term of the contract or some sort of contract extension clause. Even without such wording, drafting a contract extension agreement is a fairly easy process.
Your contract extension agreement will generally require the following information:
- The names and contact information of the partners in the original partnership agreement
- A summary of the general nature of the partnership agreement you're extending
- The date the extension will be effective, and the date on which it will end
If you will be completing the contract extension agreement as a separate agreement, it's good practice to attach the original partnership agreement as a schedule to your extension agreement. You also can incorporate your agreement to extend your contract by adding it as an addendum to your existing contract. An addendum is anything you add to your contract, and addendums often contain additional terms to the initial contract. In this case, your contract extension addendum works to extend the existence of the contract beyond the initial termination date.
Whether you and your partners wish to extend the current term of your partnership agreement because you need more time to reach your specific goals, or the relationship is a thriving one you all wish to see continued, a contract extension agreement is an easy and effective way to continue your partnership.