An extension agreement allots additional time to an existing legal contract. This agreement is reached between two or more parties regarding the extension of the existing contract. There are various forms that may also be used to extend the performance time under an existing legal contract.
Extension agreements can be used to allow extra time to make a payment, continue a lease, or file a legal document. The agreement is an understanding between both parties regarding the existing contract terms.
In banking, a lender may choose to move back the due date on a loan through an extension agreements. Lenders are often willing to do this because they have reason to believe that the borrower is unable to meet the current deadline but will have an improvement in their financial situation. Extending the loan will therefore benefit them more than calling it due when the borrower is unable to complete payment.
A general extension agreement can take the form of a simple addendum to an existing legal document in which the two parties state that as of a certain date they both agree to extend the terms of the earlier agreement for a specified additional period of time after the current expiration date. The extension will usually state that all other terms and conditions will continue as stated in the original agreement. A new expiration date for the agreement is then set. An extension agreement is binding and can be extended to successors and other representatives.
A lease is often given an extension agreement. This type of extension agreement generally specifies the date when it goes into effect and the term for which it will apply. The agreement is between a landlord and a tenant regarding the initial lease. The two parties will then refer back to the prior lease and specify the period of time which it originally covered and then state the specific extension of the prior lease term. The dates on which the extension agreement commences and expires are stated, and any revised rent payment terms or amounts are also listed. There may be a section dealing with prorated rent if the rent terms are changing in the middle of a specified payment period. Generally, any prorated rent is due at the execution of the lease extension. The previous terms dealing with issues such as rent payment, non-payment, and late payments generally remain in effect unless otherwise stated.
Unless there is a reason to make substantial changes to an existing contract or other legal document, it is usually much simpler to create an extension agreement addendum. This provides the flexibility to extend the time period of an existing legal agreement without having to go through the entire contract process again. This can often save time, money, and effort for all involved parties. It is possible to write and execute a binding extension agreement without consulting a lawyer, but it is generally a good idea to always make certain that you understand the terms of any contract you sign. If you with to create an extension agreement, it is possible to buy a simple downloadable form on the Internet.
Author Resource:-
Mark Warner is a Legal Research Analyst for RealDealDocs.com. RealDealDocs gives you insider access to millions of legal documents drafted by the top law firms in the US. To find Extension Agreements, click here. Free Search!
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