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How to track automatic renewals in supplier agreements?

Supplier contracts allow vendors to provide services or goods to clients. The supplier contract will define the nature of the service and as well as the rights and obligations of both the client and the supplier in relation to their commercial relationship. Supplier contracts have an immediate impact on a client's operational costs which is why its important that the terms are properly understood and tracked in order to prevent unwanted renewals or complex disputes

What are automatic renewal clauses in supplier contracts?

A supplier agreement may sometimes include automatic renewal clauses which renew a contract automatically at the end of the initial term. A client will typically need to serve notice before the renewal in order to prevent it from occuring. Automatic renewal clauses may also provide guidance on potential price increases for the renewal term.

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What are the challenges with tracking auto-renewal clauses in supplier agreements?

Suppliers determine whether a contract automatically renews or not which means that auto-renewal clause are not standard. As a result, they are not easy to track and might each present their own specific conditions.

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How Vault automates the tracking of automatic renewals with AI?

Vault is a document data extraction and question answering tool which is able to detect a broad range of terms using large language model technology such as renewal clauses. Moreover, Vault is able to help clients answer questions about the specific conditions connected to the renewal clause. To get started with Vault, simply upload your supplier contracts and it will automatically extract its key terms! See below for yourself!

an illustration of vault extracting data from contracts and answering questions about them

13. Term and Termination

13.1 This Agreement shall commence on the Effective Date and continue for a period of twelve (12) calendar months (the "Initial Term") after which point it shall renew for successive periods of twelve (12) calendar months (each a "Renewal Term" and together with the Initial Term, the "Term"), unless terminated in accordance with this Agreement.

13.2 Either Party shall be entitled to terminate this Agreement for convenience on no less than thirty (30) days' notice to the other. Where Customer terminates this Agreement for convenience, the Annual Licence Fee for the then current year shall not be refunded and any termination provisions set out in the relevant Subscription Package shall also be applicable.  

13.3 If the Customer wishes to terminate this Agreement during a Renewal Term (or fails to give the requisite termination notice to the Supplier prior to the start of a new Renewal Term), the Subscription Fees due for the remainder of that Renewal Term shall become immediately due and payable to the Supplier within thirty (30) Business Days.

13.4 Subject to clause 13.5, either Party may terminate this Agreement on no less than thirty (30) days' notice to the other provided that this Agreement and Customer's obligation to make payment shall remain in full force and effect until expiry of the Initial Term or relevant Renewal Term, as applicable.

13.5 Without affecting any other right or remedy available to it, either Party may terminate this Agreement with immediate effect by giving written notice to the other Party if: (i) the other Party fails to pay any amount due under this Agreement on the due date for payment and remains in default not less than thirty (30) Business Days after being notified in writing to make such payment; or (ii) if the other Party commits a material breach of any terms of this Agreement, which breach is irremediable or (if such breach is remediable) fails to remedy that breach within thirty (30) Business Days after being notified in writing to do so; or (iii) the other Party suspends, ceases, or threatens to suspend or cease carrying on its business or a substantial part thereof, or suffers an Insolvency Event.

13.6 Without prejudice to any other rights or remedies hereunder to which the Supplier may be entitled, if the Supplier knows or has reasonable grounds to suspect that the Customer is acting in breach of its obligations under this Agreement (including failure to pay the Subscription Fees), the Supplier may notify the Customer in writing accordingly and may suspend the Customer’s and all Authorised Users’ access to the Software until such breach can be remedied, or until the Supplier is satisfied, acting reasonably, that its suspicions are unfounded.

13.7 On termination of this Agreement for any reason (a) all licences granted under this Agreement shall immediately terminate, except in respect of Customer's license right to Contracts generated prior to the termination date; (b)  all Subscription Fees which are outstanding on the date of termination shall become immediately due and payable; (c) subject to the terms and conditions of this Agreement, each Party shall return or destroy and make no further use of any Confidential Information, equipment, property and other items (and all copies of them) belonging to the other party; and (d) any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of this Agreement which existed at or before the date of termination shall not be affected or prejudiced.

Does the contract auto-renew?
Yes
How much notice must the Client give to cancel the auto-renewal?
30 days
Does the contract auto-renew?
Yes
How much notice must the Client give to cancel the auto-renewal?
30 days

13. Term and Termination

13.1 This Agreement shall commence on the Effective Date and continue for a period of twelve (12) calendar months (the "Initial Term") after which point it shall renew for successive periods of twelve (12) calendar months (each a "Renewal Term" and together with the Initial Term, the "Term"), unless terminated in accordance with this Agreement.

13.2 Either Party shall be entitled to terminate this Agreement for convenience on no less than thirty (30) days' notice to the other. Where Customer terminates this Agreement for convenience, the Annual Licence Fee for the then current year shall not be refunded and any termination provisions set out in the relevant Subscription Package shall also be applicable.  

13.3 If the Customer wishes to terminate this Agreement during a Renewal Term (or fails to give the requisite termination notice to the Supplier prior to the start of a new Renewal Term), the Subscription Fees due for the remainder of that Renewal Term shall become immediately due and payable to the Supplier within thirty (30) Business Days.

13.4 Subject to clause 13.5, either Party may terminate this Agreement on no less than thirty (30) days' notice to the other provided that this Agreement and Customer's obligation to make payment shall remain in full force and effect until expiry of the Initial Term or relevant Renewal Term, as applicable.

13.5 Without affecting any other right or remedy available to it, either Party may terminate this Agreement with immediate effect by giving written notice to the other Party if: (i) the other Party fails to pay any amount due under this Agreement on the due date for payment and remains in default not less than thirty (30) Business Days after being notified in writing to make such payment; or (ii) if the other Party commits a material breach of any terms of this Agreement, which breach is irremediable or (if such breach is remediable) fails to remedy that breach within thirty (30) Business Days after being notified in writing to do so; or (iii) the other Party suspends, ceases, or threatens to suspend or cease carrying on its business or a substantial part thereof, or suffers an Insolvency Event.

13.6 Without prejudice to any other rights or remedies hereunder to which the Supplier may be entitled, if the Supplier knows or has reasonable grounds to suspect that the Customer is acting in breach of its obligations under this Agreement (including failure to pay the Subscription Fees), the Supplier may notify the Customer in writing accordingly and may suspend the Customer’s and all Authorised Users’ access to the Software until such breach can be remedied, or until the Supplier is satisfied, acting reasonably, that its suspicions are unfounded.

13.7 On termination of this Agreement for any reason (a) all licences granted under this Agreement shall immediately terminate, except in respect of Customer's license right to Contracts generated prior to the termination date; (b)  all Subscription Fees which are outstanding on the date of termination shall become immediately due and payable; (c) subject to the terms and conditions of this Agreement, each Party shall return or destroy and make no further use of any Confidential Information, equipment, property and other items (and all copies of them) belonging to the other party; and (d) any rights, remedies, obligations or liabilities of the parties that have accrued up to the date of termination, including the right to claim damages in respect of any breach of this Agreement which existed at or before the date of termination shall not be affected or prejudiced.

Does the contract auto-renew?
Yes
How much notice must the Client give to cancel the auto-renewal?
30 days
Does the contract auto-renew?
Yes
How much notice must the Client give to cancel the auto-renewal?
30 days

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