The term “extension” is used both in business relationships and in everyday life. You can extend the supply contract, or you can extend the energy supply contract. However, the methods of prolongation in these cases will be different. So what does it mean to “roll over” and in what ways can this be done?
Let's get ahead of ourselves, since we have already touched upon the issue of prolongation of the energy supply contract. This is a contract that will continue unless you or the supplier cancels it. This rule is established by the legislator.
If your supplier suddenly decides to unilaterally stop the supply of water, gas, or electricity due to the expiration of the contract, this gives you every right to go to court.
As part of the energy supply contract, you are a consumer of services, which means that all consumer protection legislation is on your side. If you are planning to defend your rights, be sure to seek the help of a specialist in these matters.
What does “contract extension” mean?
The word “prolongation” has French roots and literally means “extension.” It immediately becomes clear that the extension of the contract is its extension, that is, the “extension” of its validity period.
For some contracts, the term clause is essential, that is, without this, it will not be considered concluded. For others, it is unimportant, but this does not mean that the document does not have an expiration date.
This period can be prescribed by law, and if the parties have not changed it (a clear effect of the principle of freedom of contract), then it will apply to their contractual relations.
The deadlines may not be indicated anywhere, and then the norm of paragraph 2 of Article 314 of the Civil Code on the moment of fulfillment of the obligation comes into force. It implies that you demand fulfillment of an obligation when you see fit. The counterparty fulfills it within a week from the moment of such a requirement, and at this point the agreement is terminated, unless otherwise provided.
But what if the deadlines are set, but you don’t plan to end the relationship? Solution: resort to this same prolongation. Although not every contract can be extended. And not every time you want to renew a contractual relationship, you need to take any action.
It is impossible to extend a contract, the term of which is essential. These include contracts within the framework of the contract system in government procurement, in accordance with Article 95 of the Federal Law on the Contract System. It is impossible to extend the lease agreement for state or municipal land, because it is concluded only based on the results of auctions, in accordance with paragraph 1 of the resolution of the Plenum of the Supreme Arbitration Court No. 73.
There are contracts that, at the end of their validity period, become extended automatically - by law. This is possible if neither you nor your counterparty have expressed a desire to terminate the contractual relationship. This could be one of the following situations:
- rent of non-residential premises for a period not exceeding 11 months;
- trust management of property - if the owners have not made demands for redemption of investment shares;
- tour operator liability insurance. Mandatory condition: no refusal to renew within the last 3 months of the insurance contract validity period;
- energy supply (electricity, gas, water).
Paragraph 2 of Article 621 of the Civil Code says: if you live in rented housing and continue to do so after the expiration of the lease agreement, and your landlord does not object, then the document is considered renewed for an indefinite period.
This is somewhat different from a statutory extension. The fact is that the extension by law requires specific deadlines, namely those that were originally prescribed in the agreement. The renewal of the relationship between the tenant and the landlord does not imply any time limits.
Automatic renewal is a method of extending a contract that does not require your active action. However, in cases where such an extension is not provided, you will have to take certain measures to ensure that the desired contractual relationship continues.
What if the extension is no longer needed?
If the agreement specifies the possibility of extension, then to terminate the agreement it is necessary to sign an additional document
, in which one of the parties declares its intention to terminate cooperation. A decision can be made unilaterally, without taking into account the interests of the other party.
However, the rights of the parties are protected by law, and in the case of a lease, the tenant can demand an extension of the agreement through the court if his interests were violated by the landlord without good reason.
What are the ways to extend the contract?
Most online sources offer 3 ways to renew a contract: concluding a new contract, introducing an automatic renewal clause into the original document, and concluding an additional agreement.
However, in this case, it is incorrect to classify the first as a method of prolongation, since this is precisely the beginning of contractual relations anew, although not from scratch.
We can assume that if you are reading this text, you are interested in ways to extend the contract, and not in concluding a new contract. After all, the latter may be accompanied by the need to carry out pre-contractual work (negotiations, re-collection of necessary documents), which usually takes a lot of effort and time .
In fact, there are 2 clean ways to extend the contractual relationship: initially introduce a condition for extension or subsequently enter into an additional agreement. agreement. If you are just at the stage of signing a contract and already assume that an extension may be required, add wording to it like: “The contract is renewed for another period if at least one of the parties has not expressed a desire to terminate the contractual relationship in writing within 1 month.” .
If necessary, you can clarify that extensions in this way are possible more than once. Please note that with this renewal method, other terms of the agreement will remain unchanged.
The conclusion of an additional agreement gives the parties greater freedom in terms of the opportunity to extend and at the same time make some changes to the document. However, please note: if you change any of the essential conditions, it will no longer be additional. agreement, but a new contract.
An additional agreement is resorted to during the validity period of the main one, as well as when the validity period of the main one has already expired. According to the requirement of paragraph 1 of Article 452 of the Civil Code, the agreement must be concluded in the form in which you concluded the agreement itself (most often in writing).
What must be included in it? Details of the main document (it should be clear what exactly you want to extend), your and your counterparty’s data, as well as the very wording about the desire to extend the contractual relationship, indicating the deadlines. The duration of the new contract period may coincide with the original one, or may be different (again, the principle of freedom of contract applies).
To summarize: contractual relations, in the absence of objections from the parties, can be extended by law, or by the actions of the parties themselves. If you are at the stage of negotiations and are planning long-term cooperation, we recommend that you immediately add an automatic extension clause to the contract.
If you missed this point, but do not want to enter into a new agreement, you can draw up an additional agreement to it, in which you will provide for a condition for an extension, single or multiple.
Sources:
Prohibition on extending public procurement contracts in the contract system
Prohibition on extending lease agreements for state and municipal property
Advantages and disadvantages of prolongation
In each individual case, extension may have its own advantages and disadvantages. Therefore, it is worth considering such an extension of cooperation carefully.
| Advantages | Flaws |
|
|
In general , prolongation is very beneficial if the partnership is beneficial to both parties to the agreement
. It can eliminate unnecessary paperwork and interruptions in cooperation. But you should pay close attention to such procedures and promptly declare your intentions to your counterparties if the extension provided for in the agreement is no longer needed.
How is it happening?
All features and conditions for opening a deposit are specified in the agreement. There is also a clause regarding the extension of the contract. Not all agreements can be extended in principle.
- The deposit can be extended for an initial period, or for a contractual period - more or less than the initial one.
- Renewal may occur an unlimited number of times or strictly limited. Again, it all depends on the agreement.
Deposit “Savings Account” Home Credit Bank, Person. No. 316
up to 8.5%
per annum
from 1
Make a contribution
- You can refuse automatic prolongation, even if the option is stated in the deposit description.
- With a non-automatic extension, you can sign not a new contract, but an additional agreement.
With a deposit without extension, it is only possible to conclude a new agreement. You need to come to the bank with your passport and re-register the deposit. Banks now offer online deposits, which can be managed using online banking. In online deposits, automatic prolongation is not necessary, because renewing the deposit will take a little time.
If you want to withdraw money before the deposit is renewed, call the bank in advance and inform them of your intention. Otherwise, the branch may not have the required amount of money. But after a telephone request, the operator will reserve the required amount of money.
Is it possible to extend the employment relationship?
For labor relations, the question of what it means to extend a contract is especially relevant. Sign a new one or change the existing one?
A fixed-term contract is extended in two cases:
- extension due to the employee’s pregnancy, if the period expires during pregnancy and the employee has asked for this in writing and provided a medical certificate of pregnancy (until the end of pregnancy or until the end of maternity leave, if such leave has already been granted) (Part 2 of Art. 216 TK);
- for certain categories of workers (teachers of higher educational institutions) (Article 332 of the Labor Code of the Russian Federation).
In other cases, it is safer to fire the employee and enter into a new fixed-term employment contract.
IMPORTANT!
Even in the Ministry of Labor, different specialists have different opinions regarding the possibility of prolonging labor contracts.
Letter No. 4413-6 dated October 31, 2007 explained that it is possible to make changes to an employment contract, regardless of its type (fixed-term or indefinite), including changing its expiration date. In particular, the extension of the powers of the head of the organization on the basis of a decision of the management bodies, if the contract term, taking into account the extension, does not exceed five years, is allowed (based on Articles 32, 33, 39 of the LLC Law, clause 2, part 12, article 58 of the Labor Code) .
But there is a letter from the Ministry of Labor dated December 8, 2008 No. 2742-6-1 stating that in this case a new contract is concluded with the manager.
Since letters from the Ministry of Labor are not binding regulations, the question of the possibility of extending a fixed-term employment contract remains controversial.
Example of an additional agreement to change the validity period of a fixed-term employment contract
| Additional agreement No. ___ to the Employment contract No.____ from “___”________ ____ G. ______________ | "___"____________ _____ G. |
___________________________________ (name), hereinafter referred to as "Employer", represented by ___________________________________ (position, full name), acting on the basis of ___________________________________ (charter, regulations, power of attorney), and ___________________________________ (full name, passport details ), hereinafter referred to as “Employee”, collectively referred to as “Parties”, guided by Art. 72 of the Labor Code of the Russian Federation, have concluded this Additional Agreement to the fixed-term Employment Agreement dated “___”________ ____, No. ___ on the following:
1. Paragraph ___ shall be stated as follows: ______________________________ (indicate the validity period subject to its changes, but not more than 5 (five) years).
2. All other provisions of the Employment Agreement remain unchanged.
3. This Additional Agreement comes into force from the moment it is signed by both Parties and is an integral part of the Employment Agreement dated “___”________ ____, No. ___.
4. This Additional Agreement is drawn up and signed in two copies having equal legal force, one of which is kept by the Employer, the other is transferred to the Employee.
Details and signatures
| Employer: | Worker: |
| _________________ (Name) | _______________________ (FULL NAME.) |
| Legal/postal address: ___ | Address: ________________________ |
| _______________________________ | _______________________________ |
| INN/KPP _____________________ | Passport details: ____________ |
| OGRN _________________________ | ______________________________ |
| Phone fax: ________ | Telephone: ______________________ |
| E-mail address: _______ | E-mail address: _______ |
| Bank details: _________ | _______________________________ |
When is a deposit extension needed?
When the country's economy is stable, rates do not fluctuate - it is better to make deposits with automatic extension. There is no risk of interest rate changes, so there is no risk of savings being burned out.
Contribution “My precious. Promo" SKB-Bank, Lit. No. 705
up to 7.1%
per annum
from 10 thousand
up to 367 days
Make a contribution
When the ruble is devalued, people buy foreign currency en masse, and a “currency panic” begins. To force people to keep money in domestic currency, banks raise interest rates. In such a situation, it is better not to use the option of automatically extending the contract, but to make short-term deposits and carefully monitor exchange rates.
Can an MFO refuse to extend a microloan?
Yes, such a scenario is possible - the microfinance organization has the right to do this. The most common reasons for refusal:
- a limit has been set on the number of contract extensions, and it has been exhausted. For example, there is a limit of 10 extensions, and the client submits an application for the eleventh time;
- the client systematically violated the terms of the contract. This could be any of the following actions: constantly made small delays; did not adjust personal data when they changed (for example, when a new phone number appeared); frequently applied for restructuring or refinancing;
- after re-checking the data, the company found client data that did not correspond to reality (errors in passport data, registration, etc.);
- significant deterioration in credit history after obtaining a loan. For example, new loans have been taken out or many applications have been submitted to financial institutions.
Online loan Creditplus, Persons. No. 004402
from 1% per day
First loan 0%
up to 30 thousand
5 – 30 days
Take out a loan
