Risk and liability
Auto-renewal
A clause that renews a contract automatically unless you cancel inside a narrow window. Easy to miss, expensive to be caught by.
What it means
An auto-renewal (or "evergreen") clause makes a contract renew itself for another term unless you actively cancel, usually within a specific window before the renewal date. If you miss the window, you are locked in for another full term.
Why it matters
Auto-renewal is easy to overlook because it does nothing at signing; it only bites later, on a date you have probably forgotten. Combined with a narrow cancellation window and a long renewal term, it can trap you in an engagement, or an ongoing obligation, well past the point you wanted out, on terms you agreed to a year earlier.
What fair looks like
- A reasonable cancellation window: 30 days' notice before renewal is common; a 7-day window buried in the fine print is not.
- Notice of the upcoming renewal, so the deadline does not depend on you remembering a date from a year ago.
- Month-to-month continuation after the initial term, rather than an automatic lock into another full year, is the friendlier structure where it fits.
Related reading
See the contract red flags checklist for the other clauses worth a second look before you sign.