Option Extension Agreement for Canada

Option Extension Agreement Template for Canada

A legal instrument governed by Canadian law that extends the duration of an existing option agreement between parties. This document maintains or modifies the rights of an option holder to exercise certain privileges, whether related to property acquisition, purchase of assets, or other contractual rights, for an additional specified period. The agreement must comply with both federal Canadian contract law principles and relevant provincial regulations, particularly regarding property rights, securities laws, and registration requirements where applicable.

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What is a Option Extension Agreement?

The Option Extension Agreement is a crucial document used when parties wish to extend the duration of an existing option arrangement under Canadian law. It becomes necessary when the original option period is approaching expiration but parties want to maintain the option rights for an additional term. This document typically includes details about the original option agreement, the extended duration, any additional consideration required, and whether any terms are being modified. It's particularly relevant in real estate transactions, corporate acquisitions, and resource development projects where longer evaluation periods may be needed. The agreement must comply with provincial and federal regulations, especially regarding property rights, securities, and registration requirements. The Option Extension Agreement serves as a bridge between the original agreement and the new termination date, ensuring all rights and obligations continue seamlessly.

What sections should be included in a Option Extension Agreement?

1. Parties: Identifies all parties to the agreement, including the original option holder and grantor

2. Background: Recitals explaining the existence of the original option agreement and the desire to extend it

3. Definitions: Defines key terms used in the agreement, including references to the original option agreement

4. Extension of Option: Core section specifying the new expiration date and terms of the extension

5. Consideration: Details of any additional payment or consideration for the extension

6. Confirmation of Original Terms: Confirmation that all other terms of the original option agreement remain in full force and effect

7. Representations and Warranties: Statements by both parties confirming their authority and capacity to extend the agreement

8. Notices: Updated contact information and methods for formal communications between parties

9. Governing Law: Specification of applicable Canadian jurisdiction

10. Execution: Signature blocks and execution requirements

What sections are optional to include in a Option Extension Agreement?

1. Modified Terms: Used when certain terms of the original option agreement are being modified along with the extension

2. Additional Conditions: Include when new conditions are attached to the extension

3. Registration Rights: Required when the option relates to real property and needs to be registered

4. Security Provisions: Include when additional security is required for the extension

5. Regulatory Compliance: Include when the extension triggers specific regulatory requirements

6. Assignment Rights: Include when modifying or clarifying assignment rights for the extended period

7. Early Exercise Provisions: Used when including special provisions for early exercise during the extended period

What schedules should be included in a Option Extension Agreement?

1. Schedule A - Original Option Agreement: Copy of the original option agreement being extended

2. Schedule B - Property Description: Detailed description of any property subject to the option (if applicable)

3. Schedule C - Payment Schedule: Details of any additional payments or consideration structure for the extension

4. Schedule D - Modified Terms: Detailed listing of any terms being modified from the original agreement

5. Appendix 1 - Corporate Resolutions: Copies of corporate resolutions authorizing the extension (if applicable)

6. Appendix 2 - Regulatory Approvals: Copies of any required regulatory approvals for the extension

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Option Agreement

Cost

Free to use
Relevant Industries

Real Estate

Mining

Oil & Gas

Technology

Manufacturing

Financial Services

Agriculture

Retail

Construction

Professional Services

Relevant Teams

Legal

Finance

Business Development

Real Estate

Operations

Commercial

Risk & Compliance

Corporate Secretariat

Investment

Project Management

Relevant Roles

Legal Counsel

Corporate Secretary

Chief Financial Officer

Business Development Manager

Real Estate Manager

Property Director

Contracts Administrator

Commercial Director

Project Manager

Investment Manager

Operations Director

Chief Executive Officer

Risk Manager

Compliance Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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