A contract extension refers to an agreement between two parties to extend or prolong a current contract for additional services, time period, or scope. This can occur when both parties are satisfied with the performance and results of the existing contract and wish to continue working together beyond its original end date. The terms and conditions of the new agreement may be similar to those in the previous contract, but they could also include changes based on new circumstances, market conditions, or other factors that have arisen since the initial signing. A contract extension can provide stability for both parties involved as it outlines expectations and obligations for an extended period of time.