Why Misunderstanding the Timing of a Renewal or an Extension Could Hurt the Contractor
The representative will also explain to the contractor the key differences between renewal and extension and how this could affect the contractorís positioning in the long run.
When it comes to the difference between a contract renewal or a contract extension there can be significant advantages and disadvantages for the contractor. Itís important to understand that you donít necessarily simply need to extend the actual terms of an existing contract under most circumstances and can use the opportunity to renegotiate, especially if youíre in a strong position.
However, itís also very important to be aware of whatís going on during the entire process, especially when it comes to timing.
Professional Representation Network has seen many cases where the formal renewal of the contract may have become bogged down within an internal bureaucracy. For some reason the contract may not have arrived and there may be a temptation to simply continue ďas is.Ē There is also a possibility that a contract could have a clause within that the contractor doesnít like for one reason or another. More negotiation may be needed, but in the meantime has the contract passed a certain trigger date and is now being considered to be ďan extensionĒ?
In circumstances such as these itís very important to make sure the proceedings start as early as possible in advance of the critical date. Itís not a good idea to continue to work, for any reason, on a specific contract while treating it as an informal ďextension.Ē The parties must have signed off on all details before that trigger date is passed. Any other arrangement could be seen as a tacit acceptance of terms.
Furthermore, in certain scenarios a professional representative may help to ensure that contracts are handled in a very specific manner, professionally and well in advance of renewal or extension dates.
The representative will also explain to the contractor the key differences between renewal and extension and how this could affect the contractorís positioning in the long run. For example, it may be that the contractorís services would be more valuable elsewhere and that the current contract should be neither extended nor renewed. This kind of decision should only be made when itís quite clear that other opportunities are significant, not just projected.
Understanding the importance of timing when it comes to extending or renewing contracts is a crucial consideration for the contractor today.
The Professional Representation Network is a complete contracting provider, delivering a variety of services to contractors from varying industries around the world. They identify opportunities, negotiate contracts and provide support to contractors at every stage of the relationship. Relying on 40 years of experience in consulting and representation and access to an established network, Professional Representation Network brings passion to help develop a contractorís professional life.
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