Contract notice periods and auto-renewals

Many supplier contracts renew automatically unless you give notice before a set date. Miss that date and you may be locked in for another year, often at a higher price. The renewal date itself is too late: the date that matters is the last day you can give notice.

The dates that matter

• End of term: when the current term finishes.
• Notice deadline: the end of term minus the notice period. If the notice period is 90 days, notice must arrive at least 90 days before the end of term.
• Deadline to change volumes or prices: some contracts let you change licence numbers or reserved capacity only before an earlier date. This can come well before the notice deadline.
• Review window: the time you need before the notice deadline to make a good decision. For a big or complex contract, this may be several months.

Read the clause carefully

• Does notice have to be in writing? To which address, or which named person?
• Is email accepted, or does it need to be by post or recorded delivery?
• Is the notice period counted in calendar days, business days or months?
• Does the renewal term match the original term, or is it shorter?
• Can the price rise on renewal, and by how much?

If anything is unclear, ask your legal team before the window opens, not the week the notice is due.

A simple routine

1. Capture the dates on day one. When a contract is signed, record the start, term, notice period and any amendment deadline.
2. Work out the deadlines. Calculate the notice deadline from the end of term and notice period, rather than guessing.
3. Open a review in good time. Start the review window early enough to gather usage, performance and budget information.
4. Decide: renew, renegotiate or exit. Write down the decision and who made it.
5. Act before the deadline. If you are leaving or renegotiating, send notice in the form the contract requires and keep proof it was sent and received.

Questions to ask in the review

• Are we using what we pay for? Low usage of licences or reserved capacity is often the biggest saving.
• How has the supplier performed against its service levels?
• What would it cost and how long would it take to switch?
• Is the budget still there?
• Do we have the negotiating leverage to ask for better terms?

Keep one owner per contract

Every contract needs a named owner who is responsible for the renewal decision. If ownership is shared, the deadline tends to pass while everyone assumes someone else is handling it. Make sure the owner has cover when they are on leave or move roles.

If you miss the deadline

Talk to the supplier straight away. Some will agree to a shorter renewal or a change in volumes, especially if you have been a good customer. Record what was agreed in writing. Then fix the routine so it doesn't happen again.

Doing this in SupplierVault

SupplierVault works out each contract's notice deadline and any deadline to change volumes or prices, shows them on a renewal radar, and reminds the owner in time to decide. Read more about contract renewals, or try it in the live demo.