Clause guide
Auto-Renewal clause: meaning, risks, and what to negotiate
Renews the contract automatically unless one party gives notice in time.
What it means
Auto-renewal clauses can quietly extend commitments and costs if cancellation windows are easy to miss.
Common risks
- • The cancellation window may be too short or hidden.
- • Pricing may increase on renewal.
- • The contract may lock you into another long term unexpectedly.
What to check before signing
- • When must notice be given?
- • Does pricing change at renewal?
- • How long is each renewal term?
Negotiation ideas
- • Require advance renewal reminders.
- • Shorten renewal terms.
- • Allow termination for convenience before renewal starts.
Example clause
“This Agreement shall automatically renew for successive one-year terms unless either party provides written notice of non-renewal at least thirty (30) days before the end of the current term.”
Frequently asked questions
Why are auto-renewal clauses risky?
They are easy to overlook and can extend cost commitments without an active decision from you.
Related clauses
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