What is a contract extension?

A contract extension refers to the prolongation of the duration of an existing contract beyond its original expiration date. This typically involves continuing the obligations and rights outlined in the initial agreement, allowing parties to maintain their relationship and avoid disruption in the performance of the contract's terms. Contract extensions are often used to provide additional time for completion of work or delivery of goods when unforeseen circumstances arise, or when both parties agree that extending the timeline is beneficial.

The other options represent different actions related to contract management but do not accurately define what a contract extension entails. For instance, creating a new contract with altered terms would imply starting fresh rather than extending the existing agreement, which fundamentally changes the contractual relationship rather than maintaining it. Cancellation of the current agreement indicates a complete termination of the contract, which is the opposite of extending it. Lastly, a process for renegotiating terms before expiry can relate to adjusting the contract, but it does not specifically imply a straightforward extension of the contract duration itself.