Ashok Kumar Pachisia 10 October 2017

Leave & licence extension agreement

L&L agreements are typically for 5 years, and which is registered. A 'supplementary' / 'extension' / 'Side' agreement on a Rs.500/- stamp paper is sometimes signed to continue the arrangement on the same terms and conditions as the principal registered agreement. This extension agreement is not registered, but forms the basis for a fresh L&L agreement with a tenure of 4 years to be registered. I would like to know , how enforceable is the extension agreement, if at the end of the first 5 year tenure either of the parties wants to back out.

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2 Replies

manoj 10 October 2017

There is no clarity in your query Manoj Advocate 8686159292

Ashok Kumar Pachisia 11 October 2017

Sir, thks for the feedback. The situation is like this:

Licensor & Licensee hv agreed for a 9 year (5+4) L&L arrangement. To save on stamp duty, the first tenure of 5 years is duly registered. The second tenure of 4 years is by way of of an Extension Agreement on a Rs.500/- stamp paper, but not registered. Both agreements are signed at the beginning of the 9 year tenure, with an understanding that the extension agreement would be the basis to register a fresh L&L agreement at the end of the first tenure of 5 years.

The query is, at the end of the first 5 year tenure, if either of the parties has a rethink and backs out of registering a fresh L&L for a further 4 years, what can be the implications or binding on the defaulting party, in view of the Extension Agreement in place..

I hope i could my query is clearer now. Look forward to your feedback.

Regards, Ashok Pachisia