Automatic renewal

Why am I locked in for another year?

Also called: Evergreen clause

Favours the drafting party

What it does

Extends the agreement for successive periods unless a party gives notice of non-renewal before a deadline, which is typically set well before the term actually ends.

Why it matters

It is the least sophisticated clause on this list and one of the most reliably expensive. Contracts renew because a date passed in a calendar nobody was keeping, not because anyone decided to continue.

What to watch for

  • A non-renewal window closing ninety days or more before term end
  • Notice required by a method nobody uses — registered post to a named officer
  • Price increases applying automatically on renewal, uncapped
  • Renewal for a full further year rather than month to month
  • Some jurisdictions require notice to the customer before an auto-renewal takes effect; do not assume the clause overrides that

What to ask for

  • Renewal converting the term to month-to-month rather than a further fixed period
  • A shorter, clearly stated non-renewal window, with email notice permitted
  • A written reminder from the vendor before the window closes
  • A cap on renewal price increases, or a stated index

How common is it

Documents filed with the SEC containing the exact phrase “automatically renew”.

3,4372019202020212022202320244,5982025
View as a table
YearDocuments
20193,437
20203,836
20214,446
20224,008
20234,264
20244,361
20254,598

Real filings using it

Source: SEC EDGAR full-text search (efts.sec.gov). Retrieved 2026-08-30. Counts are filed documents matching an exact phrase, not deals, and EDGAR indexes public-company filings — read these as public-company practice, not as evidence of what private mid-market agreements contain.

What usually gets agreed

A reminder obligation and a capped uplift are frequently agreed and cost the vendor little. Converting to month-to-month is the stronger ask and is often available where the vendor has no specific investment to recover.

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