Automatic Renewal Clause
An auto-renewal clause extends the contract unless you cancel inside a narrow window. It is fair only when you get advance written notice before renewal and can cancel without penalty.
What it means in plain English
Renewal by silence is convenient for the provider and easy to miss for you. The dangerous combination is a long renewal term, a short cancellation window that closes weeks before expiry, and a price increase on renewal.
Why it is risky
- Cancellation windows that close 60-90 days before expiry are easy to miss entirely.
- Renewal terms as long as the original lock you in for another full cycle.
- Renewal price increases are often left open-ended.
- No reminder obligation, so the burden of remembering sits entirely with you.
Red-flag wording to look for
- "This Agreement shall renew automatically for successive twelve (12) month terms unless terminated ninety (90) days before expiry."
- "Fees applicable on renewal shall be the Provider's then-current list price."
- "Termination during a renewal term shall attract charges for the balance of that term."
What fair wording looks like: Renewal only after a written reminder, a short renewal term, a cancellation window that stays open until expiry, and a capped renewal price.
Recommended counter-clause
Replace the risky clause with this wording. Square brackets are the numbers to agree.
This Agreement shall renew for successive [one (1)] month terms only if the Provider sends the Customer written notice of the upcoming renewal, including the renewal price, at least [thirty (30)] days before the renewal date. The Customer may terminate at any time before the renewal date without penalty. Any increase in fees on renewal shall not exceed [five percent (5%)] of the then-current fees. If the Provider fails to send the renewal notice, the Agreement shall expire at the end of the current term.
Hi [Name], on the renewal clause — could we add a 30-day written renewal reminder with the renewal price, cap the increase, and keep cancellation open until the expiry date? Happy for it to renew, I just don't want it to renew silently.
General information, not legal advice. Wording should be adapted to your contract and jurisdiction.
Frequently asked questions
- Are auto-renewal clauses enforceable?
- Generally yes, if clearly disclosed. What tends to fail is an unclear or hidden renewal term, or a cancellation window so short that it is effectively impossible to exercise.
- How do I track renewal deadlines?
- Scan the agreement here and export the auto-renewal and cancellation deadlines to your calendar so the reminder fires before the window closes.
Is this clause in your contract?
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