Supplemental agreements are legally binding documents that are used to modify contracts that are already in force. This type of document is sometimes used as a means of allowing the existing agreement to remain in place with the same ending date, while adding or removing some provisions or terms to the working relationship. A supplemental agreement is often an ideal solutions when there is no desire to renegotiate an entirely new contract to take the place of the current agreement.
This type of agreement has the benefit of making it possible to amend a previous agreement with relatively little effort. The usual process is a negotiation between the client and the provider to determine what changes they agree to make to the contract that currently governs their working relationship. The changes may involve modifying a couple of terms within the current agreement, or possibly adding provisions that cover a new service or product that the client wishes to begin purchasing on an ongoing basis. With this approach, any terms and provisions that are not specifically addressed in the text of the supplemental agreement remain intact, and are considered binding for the duration of the modified contract.
While many businesses choose to create a new agreement and essentially roll the old contract into the new one, a supplemental agreement eliminates the need for this type of activity. In many situations, creating a new agreement also extends the duration of the contract, a factor that may or may not be agreeable to the customer. With a supplemental agreement, the contract duration is rarely changed. Instead, the terms and conditions that apply for the remainder of the contract period are altered, without committing the customer to a longer term.
There are differences of opinion on the benefits associated with a supplemental agreement approach. Some find this a useful tool in updating existing contracts without the need to go through the process of essentially starting a whole new agreement. Those who feel the supplemental agreement model is somewhat outmoded tend to point out that the addition of supplements to an existing contract can sometimes cause conflicts that lead to difficulties between the two parties involved, due to confusion about the content of the main agreement and the supplement. Creating a new contract, according to those who do not favor the supplemental agreement approach, minimizes the opportunity for confusion, and thus helps maintain confidence and trust between the supplier and the customer.