Variation of agreement: to extend payment terms for a debt (deed)

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What's a variation of agreement: to extend payment terms for a debt (deed) and when do you need it?

Use this document if you want to make legally binding, the terms of a debt repayment agreement with a business that owes you money.

Don’t worry, this deed only varies the terms of your original contract on a one-off basis. It does not surrender or otherwise compromise your original payment rights or oblige you to adopt what is agreed here on any and/or every subsequent occasion that your debtor may once again owe you money in breach of its contract terms with you.

An agreement to pay a debt that is already due is not legally binding unless it is either supported by additional new terms agreed between the parties, (like a payment in return for the extension agreement) - or unless it is set out in a deed – as it is here in this template.

Deeds are contracts, but they have more exacting signature provisions, incorporating witnesses of signatures, which means they tend to be used in certain circumstances where a straightforward contract would be considered insufficient. They are particularly used in situations where no consideration is offered by the relevant party in whose favour the agreement is drafted, meaning that an ordinary contract would not be enforceable. The point of including the witnesses is to make clear, unequivocally, that both the signing parties fully understood what they were signing and that they intended to agree to the terms set out in the deed. An agreement to vary the terms of a business contract relating to payment obligations is a situation where a deed is considered appropriate.