An auto-renewal clause, sometimes called an evergreen clause, automatically extends a contract for another term unless you cancel within a specific window before it ends. It is one of the most common reasons small businesses stay locked into services they meant to drop.
How the clause actually works
A typical clause reads something like: “This agreement renews for successive one-year terms unless either party provides written notice of non-renewal at least 60 days before the end of the current term.” The trap is the notice window. Miss it by a day and you are committed for another full year.
Why they are risky for small businesses
The renewal date and the notice deadline are rarely the same. If your contract ends December 31 but requires 60 days’ notice, your real decision deadline is early November. Without a system to track that, the date passes unnoticed.
How to protect yourself
Read every renewal clause before signing, note the true notice deadline (renewal date minus the notice period), and set a reminder ahead of it. For a portfolio of contracts, track renewal dates in one place. Contract renewal tracking does exactly that.
Catch these clauses automatically
AI contract review flags auto-renewal language and its notice window the moment you upload an agreement. See also our clauses to review guide.
ContractsIQ provides software-based contract analysis and is not a law firm or a substitute for legal advice. For decisions with significant legal or financial consequences, consult a qualified attorney.