Additional agreement on contract extension. Sample and Form 2021

Deadlines

The possibility of extension must be fixed in the current contract, otherwise legal difficulties may arise.

In the case where the possibility of extension was not taken into account in advance, a separate agreement is concluded describing this important condition. It is important that the date of signing this new agreement must be included in the validity period of the main agreement. Otherwise, it may also be declared invalid if the matter comes to court proceedings.

Only after the possibility of extension has been legally secured can an additional agreement to extend the contract be concluded.

What obligations are terminated?

With the expiration of the contract, those obligations for which this is provided for by law or contract are terminated (clause 3 of Article 425 of the Civil Code of the Russian Federation).

For example, an agreement may contain the following provision: “With the expiration of this agreement, all obligations under it terminate.” This means that from this moment the parties are no longer bound by the terms of the agreement, including in terms of settlements.

An example of how this happens by force of law is a supply agreement. So, based on paragraph 1 of Art. 511 of the Civil Code of the Russian Federation, the courts decided that if the term of the supply contract has expired, this terminates the supplier’s obligation to supply the goods (see Position of the Supreme Arbitration Court of the Russian Federation). But sometimes the courts allow that the buyer may demand delivery of the goods even after the expiration of the contract, if the supplier did not supply the goods at all (see the position of the Arbitration Court of the districts).

Also, the court may decide that the obligation terminates with the expiration of the contract due to the specifics of this obligation. For example, the obligation of the lessor to transfer a plot of land to the tenant for use (see Position of the AS of Districts).

If contractual obligations are terminated, the counterparty cannot be forced to fulfill them (in particular, to demand payment under the contract or delivery of undelivered goods).

paper elements

The additional agreement on contract extension consists of:

Hats.
Main part. It is divided into a statement and a list of points.
Signatures of the parties.

In practice, the upper part of the document is completely copied from the main contract. Only the date of signing changes, but the names of the parties remain unchanged. In addition, you must indicate the city of signing, number and full name of the document.

There are only a few required pieces of paper:

A reference to the main contract, most of the terms of which remain unchanged. The number and date of the conclusion must be indicated.
Indication of the parties to the contract.
Indication of the new date until which the agreement between the parties will have legal force.
Information that all previous terms of the contract, except for the terms and points specified in the additional agreement, remain in force.
Number of copies of the document.

Regarding the last point, the minimum number of copies to be signed is equal to the number of parties who sign it.

Without details, signatures of both parties and the date of signing, the additional agreement will not have legal force.

What does the law say?

The first main normative act that regulates contractual relationships is the Civil Code of the Russian Federation. It contains a clause that states that the extension is drawn up in the same way as the conclusion of the main agreement. For example, you need an extension of a transaction certified by a notary; to renew it, you will have to contact a lawyer again. One of the main ones is Article 425, which states that the parties undertake to fulfill the terms of the contract until all obligations are fulfilled.

If the extension concerns labor relations, then the norms and rules of this process are described in the Labor Code.

Another regulatory act, Federal Law 223, regulates the specifics of relationships between legal entities in the field of procurement of goods, services, and works. Article 44 of the Federal Law affects the extension of transactions that relate to government procurement.

Loan agreement

Some borrowers who have entered into an agreement face financial difficulties and are unable to fulfill their obligations on time. In this case, everything will depend on the lender.

If the lender is ready to sign an additional agreement to extend the contract that satisfies the borrower, then the situation can be resolved beneficially for both parties to the agreement. If the lender does not intend to extend the loan term and revise the monthly payment amount, then the borrower faces legal proceedings.

If the decision is positive, there are several options:

Revision of the monthly payment schedule. The amount will be reduced, making it easier for the debtor to repay it.
Postponement of the final repayment date. For a certain period of time, the debt is “frozen” and cannot be repaid. For such a service, the lion's share of financial organizations requires an increase in total debt.
Increasing the amount of debt.
An increase in interest paid on a loan due to an increase in the total period of use of loan funds.
Adjustment of the ratio of loan repayment and interest. The latter may be postponed until the final months of debt repayment. Thus, the borrower will soon be able to repay only the body of the loan.

In most cases, the document adjusts the terms of repayment of the loan body. Interest is accrued and paid regardless of the degree of deplorability of the borrower’s financial situation. Debt restructuring only moves the deadlines forward.

Moreover, for prolongation, as a rule, an additional fee is charged, ranging from 1 to 25% of the total debt.

The attached additional agreement form is aimed specifically at extending the loan agreement. One of its clauses describes the amount of debt to be paid.

What is a contract extension?

In law and economics, extension is considered to be a change in the validity period of an already concluded contract. It is typical for those contracts that the parties did not manage to fulfill before their end.

In addition, they resort to extending the contract when operations under it are of a regular nature - periodic deliveries, services, bank deposits.

At the same time, it is inappropriate to conclude a new agreement; it is enough to change a couple of points. However, in any case, the extension procedure must be spelled out in the contract itself quite clearly.

Many contracts deliberately do not indicate the period of its validity. In this case, prolongation can be understood as an increase in the period for fulfilling any mutual obligations.

For example, extending the period of deliveries, performance of work, settlements or loan repayment.

In turn, a change in such deadlines will correspondingly affect the limitation period. Indeed, in the new conditions it will begin to flow after the violation of the adjusted deadlines.

Sometimes enterprises or entrepreneurs do not take contract renewal seriously. However, in reality this can lead to dire consequences.

For example, under a supply agreement, goods are transferred even when the agreement has already expired. And the buyer did not pay for these products. The supplier applies to the court to collect the debt along with penalties and incurred losses, but is refused.

This verdict of the justice body is due to the following arguments:

Since the contract has already expired, the payment terms established in it no longer apply. If so, the supplier should have previously sent a demand for payment for the goods.
With the expiration of the transaction period, the contractual provisions regarding penalties and damages lose their force. Therefore, their collection on new supplies is also impossible.

Lease contract

When drawing up an additional agreement on extension to the lease agreement, it is worth keeping in mind that all transactions that concern real estate for a period of more than a year must undergo the state registration procedure. That is, if the contract was concluded for a year, and then it is extended by an additional agreement for at least a day, then this transaction must necessarily go through Rosreestr. If the contract is terminated and a new one is concluded for a year, then such a procedure is not necessary.

Automatic contract extension

Most deposit agreements provide for automatic extension.

For example, if the client has not applied for his deposit within a certain time, the contract is considered extended for a new period with the same conditions

Another example of a transaction with the possibility of automatic renewal is a lease agreement.

So, according to Part 2 of Art. 621 of the Civil Code of the Russian Federation, if the tenant uses the property after the end of the contract, then in the absence of claims from the lessor, it is considered extended for an unlimited period.

Speaking about rent, it is worth focusing on those transactions whose subject is the rental of housing for a short period (up to a year).

If such an agreement does not specify the conditions for its renewal, then upon expiration of its validity the owner receives the automatic right to evict its occupant from the apartment and transfer it to a new user.

Supply contract

Extension of a supply agreement most often has a more complex structure than all others. Additional items include the price category of the goods supplied. After all, over time, exchange rates, demand and other fundamentally important aspects of pricing change. For this reason, business partners resort to extending deadlines and changing prices. But this doesn't always happen.

In addition to the above, renewable agreements also include a storage agreement. This is due to the fact that the storage of material assets can also be extended for a specific period and documented accordingly.

The same type of renewable agreements can include a work contract. It is drawn up and signed in most cases if the construction organization does not have time to complete construction by a certain date.

Which contracts can be automatically extended by law?

Such agreements, in particular, include:

management agreement for an apartment building. If neither party declares the termination of this agreement at the end of its validity period, it is considered extended for the same period and on the same conditions that were provided for in it (Part 6 of Article 162 of the RF LC);
electricity supply agreement. If it is concluded for a certain period, it is renewed for the same period and under the same conditions. This happens if, before the end of its validity period, neither party declares its termination or amendment or the conclusion of a new agreement (clause 2 of Article 540 of the Civil Code of the Russian Federation). In addition, it continues to regulate the relations of the parties if one of them, before the expiration of its validity period, made a proposal to conclude a new agreement - for the period until the conclusion of a new agreement (clause 3 of Article 540 of the Civil Code of the Russian Federation);
property trust management agreement. It is extended if neither party declares its termination (Clause 2 of Article 1016 of the Civil Code of the Russian Federation).

Contracts can be renewed automatically not only by law, but also by by-law. For example, if certain conditions are met, the general agreement between the credit institution and the Federal Treasury on the placement of federal budget funds on bank deposits is automatically extended (clause 10 of the Rules approved by Decree of the Government of the Russian Federation of December 24, 2011 N 1121).

When extended by virtue of a law or regulation, the contract is extended, as a rule, on the same conditions and for the same period, provided that the circumstances specified in the law or regulation have occurred.

Employment contract

Additional agreements may also occur in labor relations. When the employer wishes to increase the validity period of a fixed-term employment agreement, and the employee agrees with it. Moreover, this consent, according to existing legislation, must be expressed in writing.

A fixed-term employment contract is usually drawn up for a period not exceeding five years. There are different wording options for this period: until the previous employee returns from parental leave, until the end of the season, etc.

If there is a need to increase the validity period of a specific document, then you can draw up and attach an additional agreement to the employment contract.

How to formulate a condition for its automatic extension in a contract

To do this, specify:

under what conditions the extension will take place (including the period within which the parties can file objections against it);
for how long the contract is extended;
how many times can the contract be automatically extended?

An example of a condition statement

If within a month before the expiration of the contract, neither party has raised an objection to extending its validity, it is automatically extended for one year under the same conditions. The contract can be automatically renewed an unlimited number of times.

Alternative methods

In addition to this method of increasing the validity period of the terms of the agreement, there are others. For example:

When concluding the initial contract, one of its clauses will state that the term can be extended by exchanging electronic or paper letters. If both parties express in letters their desire to extend the contract for a specific period, then it will automatically be considered extended.
Automatic extension according to the terms of the agreement. One of the clauses states that if there are no objections from one of the parties, the agreement is automatically extended. Such long-term agreements are common among rental agreements.
Certain types of contracts imply automatic extension due to existing laws. These include agreements on travel insurance, water supply, and trust management. Even if these papers do not contain a clause on automatic prolongation, they are implied there.

What obligations remain

As a general rule, the agreement is valid until the completion of the parties’ fulfillment of the obligations specified in it (clause 3 of Article 425 of the Civil Code of the Russian Federation). It follows from this that upon expiration of the contract, the obligations not fulfilled by the parties are preserved, unless the law or contract provides otherwise.

Such obligations are most often terminated by their proper fulfillment (clause 1 of Article 408 of the Civil Code of the Russian Federation). For example, this could be payment in full under the contract. Therefore, in particular, the obligation to pay insurance compensation remains if the insured event occurred during the validity of the insurance contract. In this case, the policyholder can submit an application for payment of such compensation even after the termination of the insurance contract (clause 5 of the Review approved by the Presidium of the Armed Forces of the Russian Federation on December 27, 2017).

If the agreement of the parties or the law stipulates that the expiration of the contract entails the termination of obligations under it, then the following still remain:

obligations that, by their nature, require their fulfillment even after the expiration of the contract. For example, as a general rule, this applies to the condition of considering disputes under a contract in an arbitration court (see Position of the Supreme Arbitration Court of the Russian Federation). It seems that this approach can also be used in relation to an agreement on jurisdiction and applicable law;
obligations necessary to coordinate the relations of the parties after the expiration of the contract (for example, for the return of the leased item, security deposit, etc.).

However, the parties may establish that these obligations also cease with the expiration of the contract.

When will it be invalid

The legal force of the paper will depend on many fundamentally important points. When applying to a court, an additional agreement to extend the contract may be declared invalid in the following situations:

In case of cancellation, legal inconsistency of the original written agreement.
If a representative of one of the parties did not have the right to sign at the time of signing the document.
If the main agreement has been registered with the registration chamber, but the additional agreement has not.
If the original agreement is notarized, but the annex to it is not.

These are not all the reasons for recognizing the additional agreement as lacking legal force. In any case, when compiling it, you should adhere to generally accepted rules and recommendations.

About the benefits of prolongation

Speaking of automatic renewal, it greatly simplifies the life of counterparties, since if I want to extend the cooperation, I will have to renew the agreement. Also, the extension by law has a positive effect on stabilization and relations between the parties in general. If the contract contains the relevant provisions, the entrepreneur will not have to be distracted by re-signing the contract, which will take time.

When should you sign a new contract?

When the deadline for expiration of the contract approaches, the parties can enter into a new contract. For this purpose, new conditions are negotiated or everything remains unchanged. It is advisable to conclude a new agreement in a situation where the parties intend to cooperate in the future, but at the same time changing some points.

For example, if the owner of the premises wants to change the standard form of the contract. Thus, he can add any provisions or, conversely, exclude those already present. Often we are talking about clauses affecting liability, methods of fulfilling conditions, additional obligations or payment.

Conclusion

If we are talking about a company, the secretary must ensure that the manager always has access to the originals of all concluded contracts, as well as renewal documents. Inspection authorities or shareholders may need the papers at any time. There is no clear explanation in the law regarding the period during which the entire agreement must be kept. The recommended storage period for business documents is 5 years.

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Components of a letter

The letter is ideally printed on the organization's letterhead. This way, your contact details and name will be guaranteed to be at the top of the page. If you don’t have special forms at hand, then standard A4 format, office paper, will do. It should contain the following information:

Date the letter was written. If this is accepted in the organization, then the number.
The addressee to whom the letter is intended. In the upper right part it is customary to write your full name and also indicate your position. Naturally, if the letter is sent to an organization.
Who is sending the message? If it is sent on behalf of the organization, then this is its leader. It is necessary to indicate not only the full name, but also the position and full name of its leader.
A reference to the agreement that was concluded between its parties.
If possible, reference to the clauses of the contract, according to which the extension of the agreement occurs in this way.
From what date to what date will the terms of the existing agreement be extended?

The letter is certified by the “autograph” of the manager or a person who has the appropriate rights to sign business documentation.

Legislative position

Under current laws, extensions of contracts limited in duration are possible under certain circumstances. They are prescribed in the Labor Code of the Russian Federation (Article 59):

Employment in an organization created for a short period of time to perform certain work (for example, construction of a factory).
Occupying the position of a temporarily absent worker who, due to illness or maternity leave, cannot perform his duties.
Alternative service or internship.
Employment at a certain time of the year or performing a specific amount of work specified by agreement.
Providing work on a competitive basis. This approach is typical for representatives of the teaching staff.

After agreeing on the terms of the contract, the latter can be concluded with the following persons:

Recipients of old-age pensions.
Citizens who have health problems and are unable to work on a regular basis.
Elected persons.
Employees employed in the north, which requires moving to a new location.
Heads of enterprises.

The validity period of the agreement may vary (depending on the specifics of the work). As a rule, the document is issued for a period from 2-3 months to 5 years. During this period, the participants fulfill the obligations assumed under the fixed-term contract. The document must specify the reason why the employment relationship is implemented on a temporary basis.