Auto-renewal clauses and how to spot them
Evergreen and auto-renewal clauses lock you into another term unless you cancel inside a narrow window. How they work, where they hide, and how to stay in control.
The short answer
An auto-renewal (or evergreen) clause extends the contract for another full term automatically unless one party gives notice inside a specific window before the renewal date. Miss that window by a day and you are committed for another year. They are not unfair in themselves — they exist to avoid service gaps — but the notice period and the price-increase language decide whether they are reasonable.
How the mechanism works
Three numbers govern every auto-renewal: the initial term, the renewal term, and the notice window. A one-year initial term with successive one-year renewals and 90 days' notice means your real decision point is nine months after signing.
Some contracts renew into a shorter term (annual, then month-to-month), which is far more customer-friendly. Others renew into the same full term indefinitely.
Where the clause hides
It is rarely under a heading that says "Auto-Renewal." Check these places:
- The Term and Termination section, usually as a second or third sentence.
- An order form or schedule, which may override the main agreement.
- Incorporated terms referenced by a link — online terms of service that can change over time.
- A separately signed statement of work or service description.
The price-increase question
Renewal is where prices move. Look for whether the renewal price is fixed, capped (for example, no more than 5% or CPI), or entirely at the supplier's discretion with notice.
An uncapped renewal price combined with a long notice window is the worst combination: by the time you learn the new price, the deadline to leave may already have passed. If you accept auto-renewal, ask that any price change be notified at least 30 days before the non-renewal deadline.
Consumer rules are different
Several jurisdictions regulate automatic renewals for consumers — requiring clear and conspicuous disclosure at signup, advance reminders before renewal, and an easy online cancellation path. Some US states have specific automatic renewal laws, and consumer protection regimes elsewhere impose comparable duties.
Business-to-business contracts generally have far fewer protections. In a B2B deal, the calendar reminder is your protection.
A simple operating habit
For every contract you sign with an auto-renewal, record three dates the same day: the renewal date, the non-renewal deadline, and a reminder two to four weeks before that deadline.
It costs two minutes and it is the single most reliable way to avoid paying for a service you decided months ago to drop.
Sample clause language
Illustrative wording, written for this guide — not copied from any real contract.
This Agreement shall automatically renew for successive twenty-four (24) month terms unless either party provides written notice of non-renewal at least one hundred eighty (180) days prior to the end of the then-current term. Fees for each renewal term shall be Supplier's then-current list price.
A two-year lock-in, a six-month notice window, and an uncapped price set by the supplier. The decision to leave has to be made before you have even used most of the current term.
Following the Initial Term, this Agreement renews for successive twelve (12) month terms unless either party gives written notice of non-renewal at least thirty (30) days before the end of the then-current term. Supplier may increase fees for a renewal term by no more than five percent (5%) over the prior term, and shall notify Customer of any increase at least sixty (60) days before the end of the then-current term.
A 30-day exit window, a capped increase, and notification of the new price before the deadline to leave — so the customer can actually make an informed choice.
Red flags to look for
- A notice window longer than 60 days.
- Renewal into a term longer than the original.
- Renewal price set at "then-current list price" with no cap.
- Price notified after the non-renewal deadline has passed.
- Notice must be sent by post to a specific address, or by certified mail only.
- The auto-renewal appears only in an order form, not in the main agreement.
- No confirmation or reminder from the supplier before renewal.
What to ask for
- Reduce the notice window to 30 days.
- Renew month-to-month rather than into another full term.
- Cap renewal price increases at CPI or a fixed percentage.
- Require price notification at least 30 days before the non-renewal deadline.
- Allow notice by email to a named contact.
- Ask the supplier to send a renewal reminder — many will agree in writing.
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Frequently asked questions
What is an evergreen clause?
Another name for an auto-renewal clause. The contract keeps rolling into new terms indefinitely until someone gives notice.
Can I get out of a contract that auto-renewed?
Sometimes. Check whether the supplier complied with any required disclosure or reminder obligations, and whether consumer automatic-renewal rules apply. Commercially, many suppliers will negotiate an early exit rather than keep an unwilling customer — asking costs nothing.
How much notice is reasonable?
Thirty days is customer-friendly and common. Sixty is acceptable. Ninety or more is worth pushing back on, especially where the renewal term is a full year or longer.
Are auto-renewal clauses legal?
Yes, though consumer contracts in many jurisdictions are subject to specific disclosure, reminder, and easy-cancellation requirements. Business-to-business contracts face far fewer restrictions.
Related guides
This guide is general educational information about how these clauses usually work. It is not legal advice, and contract law differs by jurisdiction. For a decision that matters, speak to a qualified lawyer.