Auto-renewal clause
An auto-renewal clause, also called an evergreen clause, renews a contract for another term automatically unless one party gives notice by a set deadline that it doesn't want to renew.
Updated November 5, 2026 · 1 min read
Why businesses use it
It keeps service going without new paperwork every year: maintenance plans, memberships, software and leases often roll over this way. The risk sits with the customer who forgets the notice window, which is why regulators watch these clauses closely when consumers are involved.
Consumer rules
Several states regulate automatic renewals in consumer contracts. California's Automatic Renewal Law, for example, requires the renewal terms to be shown clearly before the customer agrees, the customer's affirmative consent, and an easy way to cancel. Contracts between businesses face fewer rules, but a clear clause still prevents disputes.
What to write
- The length of each renewal term, and whether the price can change at renewal.
- The notice window, such as at least 30 days before the term ends, and how to give notice.
- Whether you'll send a reminder before it renews.
In SignMaster
Put the renewal terms in your template with a checkbox field beside them for the customer to tick, so their consent to renewal is recorded along with their signature.
Sources
- California Business and Professions Code § 17602, automatic renewal offers · leginfo.legislature.ca.gov