Execution of Agreement
gb dayma
(Querist) 22 March 2010
This query is : Resolved
We have entered into commercial contract for supply of goods for a period of 1 year. In the agreement, there is clause about renewal reads as "this agreement may be renewed that may be mutually decided which will be reduced to writing". In view of the above, is it legal to mention that the agreement is renewed for 3 years on same terms and condition and reduce it on Simple Paper / Stamp paper?
Parveen Kr. Aggarwal
(Expert) 22 March 2010
A fresh agreement will have to be executed on stamp paper despite the renewal of the previous agreement on the same terms and conditions. The previous agreement just authorises the parties to renew their agreement. It is the renewed agreement which governs the relations between the parties after expiry of the term of the previous agreement.
R.R. KRISHNAA
(Expert) 22 March 2010
A fresh agreement is always not necessary and mandatory. Even after the expiry of the contract period, if the goods are supplied and invoices are raised and payments are made between the parties, it would suffice that parties intend to continue the contract and it is a deemed renewal. Such unwritten contracts are also enforceable in courts if the parties are able to show invoices and proof of payments.
Gagan Gupta
(Expert) 23 March 2010
Your contract clause itself make it mendatory to reduce it into writing, so you have to do it unless your future transactions are governed by other clauses of the contract.
