Contract Renewal Proposal Template and Cover Letter

Cover Letter

It is written that I have been associated with XYZ company for 8 years. I was hired as an assistant to the manager but due to my hard work and determination, I got promoted to the rank of manager and have been leading a team of 5 competent members working tirelessly on various projects.

It has been a fortunate opportunity to work alongside brilliant minds and learn from them on each project. We deal with a variety of clients and sign many contracts each day. Although we try our best to make sure that every point of the client is considered and taken care of but many times scenarios change during unknown circumstances or fluctuations in the economy.

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In case of great changes, contracts with clients have to be renewed to make sure that clients are aware of the project at every step and are satisfied with the work of the company. It is crucial to gain the trust of clients as they can become permanent if they are happy with our team and working conditions.

Contract renewal proposals are presented to the administration department so that clients are contacted and meetings are arranged to ensure a smooth process of renewal. I have designed a proposal for contract renewal with ABC company due to various reasons which I have mentioned in the proposal. Kindly consider my request and provide the answer at your earliest.

I shall be very grateful to you.

Regards,

Richard Martin

Manager at XYZ Company

Contact: 345 245-9XX4

Introduction

A contract or agreement is a written document that entails all the conditions that the involved parties should follow. It lists down the demands and requests of the clients and gives a fair chance to the business owner to include the terms on which they can work for the clients. These contracts are drafted to ensure that both parties are aware of their responsibilities regarding the project and if it is not taken seriously then legal action can be taken against them.

All the terms and conditions of the contract are decided in the presence of legal counsels of both parties to help them understand their rights toward themselves as well as towards each other.

Contracts are drafted after the project is handed down to the company and the conditions under which both parties will perform, are decided. These conditions help both involved parties to know expectations and requirements and allow them to work together nicely. These contracts are untouchable and can be used in a court of law. They should be followed strictly by the involved parties because the opposite can lead to serious consequences.

These contracts can be renewed for various reasons, but this act occurs if both parties are in agreement with renewal. Renewal of contracts is mostly performed to add more conditions in the existing contract which are related to the changing work environment. Many times, clients want to add more details later, which requires a contract renewal.

Reasons

Contract renewal can be done for various reasons that seem important to either the client or the company. Some of the significant reasons are mentioned below,

  • Certain conditions were omitted by the clients but in the light of progress in project, those conditions should be added to contract.
  • If company or client feels threatened or cautious about each other, further clauses can be added to the contract.
  • Contract can be renewed if the completion time of project exceeds the time mentioned on the contract, so the contract requires a renewal.
  • With inflation and other economic issues, contract renewal becomes mandatory to add new conditions and information.
  • Contract renewal can be arranged for adding more conditions to the existing contract according to the demands of project.

Significance

Every project has its high and low points which can be weighed at the end to evaluate the successful the project. It is not easy to draft and follow a contract as it limits you to a certain step and does not provide much room but there are many positive aspects as well. Significance of the agreement is,

  • It provides acknowledgement to the company that their work will not go unnoticed if it becomes a part of contract later.
  • All the conditions of both parties are mentioned in the contract which allows them to use these conditions are their strong points.
  • If the contract expires, renewal provide a way to continue it for a longer period.

Automatic contract renewal

Automatic contract renewal in case of expiration of existing contracts have several advantages which are provided below,

  • They do not require any manual paperwork and no services needs to be contacted as it can be renewed on its own.
  • If both parties are agreed on expires contract and enjoy a happy working environment, then contract renewal is no hassle.
  • No pauses are required in the project as it can be renewed without any interruption or addition.
  • Company can enjoy a sustainable revenue for the coming period of contract as it will be renewed.

Automatic contract renewal poses a problem when they have renewed automatically and clients are unaware of the renewal as it can cost them a fortune to stay in relation with a company for another time period.