Q&As

In a business-to-business contract where a contractual long-stop date has passed but the parties wish to continue with the contract, should they document their intention to continue or enter into a new contract?

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Published on LexisPSL on 30/07/2019

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • In a business-to-business contract where a contractual long-stop date has passed but the parties wish to continue with the contract, should they document their intention to continue or enter into a new contract?
  • Long-stop date
  • Variation
  • Termination and replacement of existing contract

In a business-to-business contract where a contractual long-stop date has passed but the parties wish to continue with the contract, should they document their intention to continue or enter into a new contract?

Long-stop date

As stated in the Drafting Notes to clause: Long-stop date definition, the term long-stop date is commonly included in an agreement that is subject to conditions, with the definition setting out the date by which such conditions must be satisfied or waived. It could, however, be used to represent a date by which certain obligations in an agreement must be met or certain rights in an agreement must be exercised.

The parties should firstly consider the contractual purpose of the long-stop date and the implications of the long-stop date passing. Consider whether the long-stop date is for a condition precedent to be fulfilled prior to the agreement properly coming into force, or if the long-stop date refers to a date by which an obligation must be performed by one of the parties under an already in force contract. The consequences of the long-stop not being met will depend upon how that provision interplays with other contractual provisions such as those regarding term, termination rights, liquidated damages, waiver and consequences of termination clauses. Consider whether as a result of the long-stop date passing the contract has already terminated or never come into force

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