Capturing (and Calculating) Term-Related Information

Lots of our customers care about the expiry and renewal dates for their agreements. But it’s almost never as simple as just “capturing” this information from a document.

Start Dates

In order to know when an agreement expires or renews, we usually need to know when it starts. But there are three common types of start date:

  1. Execution Date - when all parties have signed the agreement.
  2. Effective Date - when the terms of the agreement come into force.
  3. Commencement Date - when the provision of goods or services begins.

Capturing all three separately is not particularly helpful, so we wrap them into what we call an Active Date, which takes whichever of those dates is present, in order of Commencement Date, Effective Date, and Execution Date.

Expiry Dates

As the simpler of the two, let’s start with expiry dates. Often an agreement will clearly state the date on which it expires. Easy - just capture it.

Other times you will have something like:

This agreement begins on 3 January 2019 and will continue for two years before expiring.

There is no expiry date, but you can work it out by adding two years to the start date. In this case, it would be 3 January 2021.

So in this case, simply capturing the expiry date isn’t good enough. You have to capture the start date and the Term, and then run a calculation to get the expiry date. Nomio does that automatically.

Renewal Dates

Renewal dates are a little trickier. Lots of agreements auto-renew (e.g. on an annual basis), which means you have a new renewal date each year. These are almost never spelled out in the agreement itself. But to know the renewal date, you first need to know the Initial Term, and the Renewal Term for any subsequent renewal dates.

This agreement begins on 3 January 2019 for an Initial Term of 2 years, after which point it shall automatically renew for successive Renewal Terms of 12 months, unless written notice is provided by either Party at least 30 days prior to the end of the then-current Term.

So the renewal dates would be every 3 January, starting from 3 January 2021.

In the example above, simply knowing about the renewal dates wouldn’t be of much use. What you usually care about is the Renewal Notice Deadline - when you have to give notice to terminate. In this example, you’d have to work 30 days back from the renewal date, so the deadline would be 4 December prior to each renewal date.

Conclusion

You can now see why staying on top of expirations and renewals is a lot more complex than meets the eye - we need to capture more information than you’d initially think!

Luckily, we’ve already done the work of figuring out how this information slots together.

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