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The primary purpose of this letter is to make a formal written request to a party to an existing contract to extend or renew the term of the contract.
An extension of a contract is a mutual arrangement between parties to stretch the duration of the existing contractual arrangement beyond its original expiration date. For example, a builder who had agreed to complete the construction of a building in a year could not complete construction. Now, both the builder and client can extend the period of completion for another few months without changing other contents of the contract.
Under the renewal of the contract, the parties can either renew the existing contract without any changes or draft a contract with new terms. For example, the lease agreement after the expiration can be renewed with the same rent or updated rent for a further period.
Sometimes, an extension or renewal of a contract may be agreed over verbal communication with the other party to the contract, but it is always better to put the request in writing (even if verbal approval has already been provided) to avoid any disputes in the future. This letter can be used to extend or renew the period of any type of contract between individuals or diverse types of organizations/companies.
This letter removes the need to enter into a new contract altogether and thereby saves a lot of time and resources. For renewal of the contract, the parties just need to make minor modifications to the existing contract and execute it without any further complications or delay. To clarify the changes, the earlier signed contract needs to be examined and the correct clause number or titles shall be added to the letter.
The letter covers the major areas including the details of the party, details of the existing contract, clauses in the existing contract denoting the renewal or extension, amendments or additions to the existing contract, communication details, etc.
Before sending this letter, the original contract entered into between the parties shall be thoroughly reviewed. The sender may have to comply with particular forms, periods, methods, etc. while sending this kind of letter.
This letter can be printed, signed, and directly handed over to the other party or sent through a registered post. This letter can also be sent as an email attachment. If a communication method is mentioned (normally mentioned under the clause "Notices"/"Communication") under the original agreement, such communication method shall be used. If not mentioned, any suitable method can be used.
The transactions related to a contract will be covered under the Indian Contract Act, 1872.
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A guide to help you: How to Send a Letter?
Country: India