What is the main purpose of an ancillary contract?

The main purpose of an ancillary contract is to modify a primary contract. Ancillary contracts act as supplemental agreements that provide additional terms or conditions related to an existing contract. By serving this role, ancillary contracts can clarify, enhance, or alter the obligations and rights established in the main agreement without entirely replacing it. This is particularly useful in complex transactions where parties may need to address specific aspects of their relationship or adjust certain conditions while still relying on the original contract for the primary framework of their agreement.

For instance, if parties enter into a primary contract for a sale, an ancillary contract might be drafted to introduce contingencies or requirements regarding financing, delivery terms, or obligations that arose after the primary contract was formed. This way, ancillary contracts help maintain flexibility and adapt to the evolving circumstances surrounding the primary transaction.