Postponement: Overview, definition, and example
What is postponement?
Postponement refers to the act of delaying or rescheduling an event, deadline, or obligation to a later time. In a contract, a postponement clause allows one party to push back the date by which a certain action must be completed. This could apply to things like project deadlines, payments, or scheduled events.
For example, if a business has agreed to deliver goods by a certain date but is unable to meet the deadline due to unforeseen circumstances, they may request a postponement of the delivery date.
Why is postponement important?
Postponement is important because it provides flexibility in situations where delays are unavoidable. It can help prevent legal disputes by clearly stating the terms under which deadlines can be pushed back. Without a postponement clause, a party might face penalties or legal action if they fail to meet the original deadline, even if the delay was outside of their control.
In business contracts, postponement clauses help both parties understand how to handle delays and avoid unnecessary conflict.
Understanding postponement through an example
Imagine a software development company is contracted to deliver a new application to a client by the end of the month. Due to technical difficulties, the company is unable to complete the project on time. They request a postponement clause to push the delivery date by two weeks. Both parties agree on the new timeline, ensuring that no penalties are incurred as long as the work is completed by the revised date.
In another example, a venue booked for a wedding is forced to postpone the event due to unexpected weather conditions. The couple and the venue agree to move the wedding to a later date, and the terms of postponement are outlined in the contract, so both sides are clear on the new arrangements.
An example of a postponement clause
Here’s how a postponement clause might look in a contract:
“In the event that circumstances arise that prevent the timely performance of this Agreement, the parties agree to a postponement of [Insert Event/Action] to a mutually agreed-upon date, provided that notice is given at least [Insert Notice Period] in advance.”
Conclusion
Postponement clauses are essential for businesses to ensure that delays are handled fairly and with clarity. By including a postponement clause in contracts, parties can safeguard themselves against penalties or disputes caused by unforeseen delays. It provides flexibility while ensuring both sides are on the same page about any changes to the agreed-upon timelines.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.