what an automatic renewal clause means, and how to cancel.
It means the contract renews itself for another term unless you cancel in a specific window before the current term ends. Doing nothing is what causes the renewal, not what prevents it.
You can cancel, but only on the clause's terms: by a date counted backwards from the end date, in the method the clause names. Miss that window and the next term has already started.
So the date that matters is not the end date. It is the end date minus the notice period.
this page says what the words mean. it does not say what to do about them, and it is not legal advice.
where it turns up
in the term and termination section of subscription agreements, order forms, service contracts, leases, maintenance and support agreements, and insurance. Also called evergreen renewal, or a rollover term.
the clause, as it usually reads
wording of the kind these documents carry. it is written for this page, not copied from anyone's contract.
3. Term and Renewal
The Initial Term begins on the Effective Date and continues for 12 months.
This Agreement automatically renews for successive terms of 12 months each
(each, a "Renewal Term") unless either party gives written notice of
non-renewal at least 60 days prior to the end of the then-current term.
Notice must be sent to the address in Section 14 by certified mail. Fees for
any Renewal Term are the then-current list fees. Customer may not terminate
a Renewal Term once commenced, and fees for the Renewal Term are
non-refundable.
line by line
automatically renews unless either party gives notice
The default is continuation. Nobody has to sign anything, agree to anything, or send anything for the next term to begin — silence does it.
Most people hold a contract in their head as ending on the end date, continuing only if renewed. This is the reverse. Here the end date is the thing that requires action.
at least 60 days prior to the end of the then-current term
This is the whole clause in 1 phrase. The cancel-by date is the end date minus 60 days. After it passes there is nothing to cancel, because the renewal is no longer avoidable.
"Then-current term" matters on any renewal after the first. The window moves with each term, so the date computed once at signature is only correct for the first year.
Notice periods in these clauses commonly run 30, 60 or 90 days. A 90-day window on an annual contract means the decision is due 9 months into a 12-month term. That is well before most people think about it.
written notice, sent to the address in Section 14, by certified mail
The method is part of the requirement, not advice about how to do it. A clause that names certified mail to a specific address is not satisfied by an email to the account manager, however clearly it was received.
This is where cancellations most often fail. The customer cancelled in time and in substance, in the wrong form, and the renewal ran anyway.
The requirement is mechanical: the notice clause the renewal clause points at sets the medium, the recipient, and when notice is treated as given.
fees are the then-current list fees
The renewal term does not necessarily carry the price of the term that has ended. This wording renews the contract at whatever the seller's list price is at that time.
Variants cap it. "Not to exceed 5% above the prior term" and "at the same fees as the Initial Term" both fix the number. "Then-current list fees" leaves it to be set later by 1 side.
may not terminate a Renewal Term once commenced, non-refundable
This is what a missed window actually costs. Without these sentences a missed notice deadline means paying until you can next get out. With them it means the full next term.
Read alongside a clause allowing termination for convenience, they can conflict. Which controls is normally settled by the order-of-precedence sentence in the entire agreement clause, or by whichever clause is drafted as the exception.
where consumer contracts are treated differently
Consumer negative-option offers have their own federal rules, though narrower than is often reported. The Restore Online Shoppers' Confidence Act governs negative-option features in transactions effected on the internet. It requires clear and conspicuous disclosure of the terms, informed consent before charging, and a simple mechanism to stop recurring charges. ROSCA, 15 U.S.C. § 8403 — law.cornell.edu, read August 31, 2026.
The Federal Trade Commission's broader "click to cancel" rule, 16 CFR Part 425, is not in force. The Eighth Circuit vacated it in full on July 8, 2025, days before its compliance date. The ground was that the Commission had not carried out the required preliminary regulatory analysis. Reported by WilmerHale, Crowell & Moring, Latham & Watkins and DLA Piper client alerts, read August 31, 2026.
Several states go further than the federal baseline. California requires clear and conspicuous disclosure of automatic renewal terms before purchase, plus the consumer's affirmative consent. It also requires a cancellation mechanism in the same medium the consumer used to sign up. Cal. Bus. & Prof. Code §§ 17600–17606 — leginfo.legislature.ca.gov, read August 31, 2026.
California's amended obligations, added by AB 2863, took effect January 1, 2025. They apply only to contracts entered into, amended or extended on or after July 1, 2025. Cal. Bus. & Prof. Code § 17602(j) — leginfo.legislature.ca.gov, read August 31, 2026.
None of that reaches an ordinary business-to-business contract. Between 2 companies, the clause is the rule.
the wording that changes it
the same clause does very different things depending on which of these it carries.
- renews for successive terms of 12 months
- each miss costs a full year. a month-to-month renewal after the initial term costs a month.
- unless either party gives notice
- both sides can stop it. "unless Customer gives notice" leaves the seller able to renew while the customer cannot.
- at least 90 days prior to the end of the then-current term
- the decision is due 3 months before the end, which on an annual contract is before most budget cycles reach it.
- notice by certified mail to the address in Section 14
- the form is mandatory. an email in time can fail where a letter in time would have worked.
- fees for any Renewal Term are the then-current list fees
- the renewal price is not the price you agreed. a cap, or "the same fees as the Initial Term", fixes it.
- the Provider will give Customer notice 30 days before the non-renewal deadline
- a reminder obligation on the other side. it makes the window far easier to hit, and its absence is why the deadline is usually missed.
- Customer may terminate a Renewal Term on 30 days notice
- the renewal happens, but a missed window costs a month rather than a term.
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documents this clause sits in
whole examples, with the summary sign writes for each one.
what a software order form actually says · what a lease addendum actually says
the other 8
what indemnify and hold harmless actually means · does an NDA expire if it has no end date · what joint and several liability means in a lease · can you cross out a clause before signing · how long you have to cancel after signing · what a personal guarantee means on a lease · what a binding arbitration clause means · what entire agreement means in a contract