As a professional, I present to you an informative article on “Extension of Agreement Term.”
When two parties enter into an agreement, it is done with the expectation that the agreement will be valid for a certain period. However, there may arise situations where the agreement term needs to be extended. This may happen because the parties involved require more time to fulfill their obligations, or there are unforeseen circumstances that necessitate an extension.
Agreement terms may be extended through various means, and it is essential to know which method is appropriate and what the legal implications are.
The following are some of the ways agreements can be extended:
1. Mutual Agreement
If both parties are willing to extend the agreement term, they can do so by mutual agreement. This can be done through a written agreement where both parties sign and date the extension proposal.
2. Amendment of Agreement
Agreements may also be extended through an amendment to the original agreement. This legal document is drafted to outline the agreed-upon changes to the original agreement.
3. Implied Agreement
Parties may also extend the agreement term through an implied agreement. This happens when the parties continue to act as if the agreement is still valid even after its expiry date.
It is crucial to note that the extension of an agreement term has legal implications, and it is essential to understand them.
Firstly, the extension of an agreement term may affect the agreement`s termination date, and as such, parties must revise their obligations and responsibilities accordingly.
Secondly, the extension of an agreement term may affect the agreement`s pricing structure. Parties must adjust their prices and payment terms to reflect the new agreement term.
Lastly, the extension of an agreement term may require the parties to make additional disclosures under the law, depending on the nature of the agreement and applicable legislation.
In conclusion, the extension of an agreement term is a common occurrence, and parties involved must understand the proper methods of extending an agreement term and its legal implications. Whether through a mutual agreement, amendment of an agreement, or an implied agreement, parties must ensure the extension is done legally and that all of their obligations under the extended agreement are revised to reflect the new agreement term.