Core TSIs : Contracts : Working with Contracts : Using contract options : Examples of using renewal options : Renewal options - example 2
Renewal options - example 2
Scenario
This example shows a contract with an initial duration of five years. The contract can be renewed twice for five years. After these renewals have been applied, the contract continues for an indefinite period.
Diagram of a contract with an end date and a renewal for an indefinite periodDiagram of a contract with an end date and a renewal for an indefinite period
The following settings are used:
Contract
Field
Field value
Start date contract
January 1, 2021
Duration
5 years
Proposed expiration date
December 31, 2025
Renewal options
Description
Priority
Renewal term
Repeat renewal
Status
Renewal: 5 years
1
5 years
No
Active
Renewal: 5 years
2
5 years
No
Active
Renewal for indefinite period of time
3
Not specified
No
Active
Result
The first two renewal options extend the contract by five years each.
When the third renewal option is processed, the contract is renewed for an indefinite period because no value is specified in the Renewal term field.
For information on processing renewal options and renewal priorities, see Renewal options - example 1.