Auto-renewal clauses: how to avoid getting locked in
What is a auto-renewal clause?
Also called an 'evergreen' clause, it renews the term (often for another full year) unless you give notice by a deadline — sometimes 60 or 90 days before the current term ends. Miss the window and you're committed for another cycle.
Why it matters
Auto-renewal quietly erodes your negotiating leverage and can trap you in pricing or terms you'd otherwise renegotiate. Combined with a long notice period, it's easy to miss the cancellation window entirely.
Red flags to watch for
- Notice period longer than 30 days
- Renewal for a full year rather than month-to-month
- No requirement for the vendor to remind you before renewal
- Price increases that apply automatically on renewal
- Cancellation only by certified mail or other friction
Safer language to ask for
Prefer month-to-month renewal, a 30-day notice window, an email reminder before renewal, and a cap on any renewal price increase.
Example: before & after
Risky
This Agreement renews automatically for successive 12-month terms unless either party gives written notice at least 90 days prior to the end of the then-current term.
Safer
This Agreement renews monthly unless either party gives 30 days' written notice. The Provider will email a renewal reminder at least 30 days before each renewal.
FAQ
Are auto-renewal clauses legal?
Generally yes, though some jurisdictions require clear disclosure and reminders. The risk is practical: missing the cancellation window.
How do I get out of an auto-renewal?
Diarize the notice deadline immediately, send written notice in the required form, and keep proof of delivery.
Check your own contract
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