Automatic Renewal Sample Clauses

Automatic Renewal. Each Schedule will renew automatically at the end of the then-current Schedule Term for a Schedule Renewal Term unless terminated in accordance with this Agreement by either You or Company.
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Automatic Renewal. If your Order Document states that your renewal is automatic, you may terminate the expiring Cloud Service term by written request, at least ninety (90) days prior to the expiration date of the term that is set forth in the Order Document. If IBM or an IBM Business Partner does not receive such termination notice by the expiration date, the expiring term will be automatically renewed for either a one year term or the same duration as the original term as set forth in the XxX portion of the Order Document.
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Automatic Renewal. The parties agree that at the expiry of the Initial Term or any subsequent renewed term, this Agreement shall be renewed for a further term of 12 months on the same terms and conditions as contained in this Agreement, unless written notice is given by one party to the other parties of its intention not to renew the Agreement at least 60 Working Days before the expiry of the Initial Term or any subsequent renewed term.
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Automatic Renewal: Everything you need to know

The automatic renewal clause implies that the contract will automatically renew if one of the parties has not terminated the contract or the party does not wish to terminate the contract. In this case, the terms of the agreement get revived after a fixed period. To stop this succession of renewal, one of the signing parties has to give prior legal notice before terminating the contract.

Automatic renewal clauses, or evergreen terms, are commonly found in commercial agreements, supply agreements, purchase agreements, software license agreements, consulting agreements, equipment rental agreements, and office leases.

Importance of automatic renewal

Automatic renewal provision allows the parties to continue their relationship easily without getting involved in unnecessary paper works and avoiding the term-end conditions in some agreements; when the payment-making party is not reminded to renew the contract, the regularities in payment increase, which results in the smooth flow of transactions and healthy relations between the parties.

Automatic renewable contracts provide flexibility to the contract period.

Automatic renewal clauses are mainly enforceable. The only exception is if there is a statute in the state whose law is governing the agreement restricting evergreen clauses or case law is considered in such a state that refuses to apply it. This clause can prove beneficial to both parties, but it's important to understand all the details of the contract before getting into an agreement.

Points to never forget

You might have valid business reasons for signing a contract with an automatic renewal provision, but be sure to consider these keys as important points to remember before making a decision.

  • Do not agree to evergreen contract clauses blindly or without awareness.
  • Examine all the risks, rewards, and make a wise decision based on reasoning and information.
  • Be careful while signing the contract with lengthy or exclusive automatic renewal clauses.
  • Apply policies and procedures in advance to manage evergreen contract approvals and non-renewals. Form a strategy before signing the contract.
  • Take legal advice, or approach for a suggestion on enforceability and contract drafting with evergreen clauses.
  • Enforcement of automatic renewal changes according to law and change in state.

Since an automatic renewal clause is a risky clause, be prepared with the procedures beforehand to manage the contract. Organize recurring reminders in advance to multiple individuals of the deadline for delivering the required non-renewal notice. Try to provide enough time to decide whether to follow the agreement under its current provisions, renegotiate, or terminate before delivering the notice of non-renewal.

Beware of the automatic renewal clause.

Key issues for automatic renewal

Mentioned below are some key issues that every party experiences during the activation or termination of automatic renewal clauses.

Notice transmission

If a party decides to discontinue the agreement, such party must make sure that the notice contains all the required statements and reasons. This also includes the awareness of the recipient, receiver, timing, and source through which the notice would transmit. It helps to avoid confusion and arguments between the signing parties.

For conveying the notice, a certain method is followed, which enables the sender to indicate a legal notice of terminating the contract, such as a certified mail or legal letter that requires a return receipt of confirmation.

Timeline of notice

The time required to send the notice of termination of the contract before the actual agreement is not fixed. The timeline for advance notice of a non-renewing party differs. It depends on many factors, including the terms of the previous and ongoing contract, relations between the party, and the circumstances of the agreement.

It is expected from both parties to negotiate this issue carefully as short notice would not always seem to be practically advantageous. Most of the time, the parties have to unwind their agreement to prepare for termination, which sometimes happens rapidly in which many risks are involved. It also affects profit and loss in the agreement.

Termination of contract at special conditions

Some parties might desire to terminate the contract at certain conditions of the agreement. Concerning the request of a party, it is expected that both parties should negotiate the period of advancement notice and the terms on which the agreement would end. This is not applicable for breach of agreement or inclusion of an evergreen clause.

Ending the breach of contract

In an evergreen clause, despite restrictions to the breach of contract, each party still has an opportunity to terminate the contract immediately. Considering the services, benefits, applicable terms under the agreement, it is proposed to withstand a cure period. The cure period is not a remainder of the terms applied in the agreement. It is crucial in situations where the breach is nonpayment of compensation.

Concept and application of renegotiation

An evergreen contract or automatic renewal clause does not prevent renegotiation. It supports renegotiation and allows the party to understand the terms of the agreement in a better way. Since the parties have maintained the relationship in a certain contract for a long period, it permits them to reanalyze the terms and decide whether to terminate or continue the contract. It also consents them to amend the contract in the new term if necessary.

Remolding the terms

According to the services under the agreement, in an automatic renewal clause, there is no rush to meet the ends of the agreement. The provider may avoid negotiating the terms of the agreement before the initial period of the notice or during the renewal period. It is possible to remold the terms considering the party's requirement or circumstances.

Examples of automatic renewal

A software license company's automatic renewal agreement

Term: The initial term states that the maintenance services shall begin upon the Licensee's receipt of the product under this agreement. It was proposed to continue until the last day of the calendar month of the second anniversary of the term.

Thereafter, the services will be automatically renewed for an additional one-year term unless either party provides the other with written notice to the contrary at least twenty-one days before the end of the current term to terminate the contract.

More Samples of Automatic Renewal

Automatic Renewal. 9. Once you have completed the Minimum No. Of Direct Debit Payments we will automatically c ontinue collecting the Direct Debit Payment Amount every month. Your membership will be extended by one month for each payment (“Renewal Period”). This renewal Direct Debit payment amount may only be amended if we advise you in writing giving not less than 30 days notice. Please note if your membership included the benefit of a free period then we will stop making collections during that free period and recommence making collections on the renewal date.
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Automatic Renewal. Upon the expiration of the original term or any renewal term of employment, Employee’s employment shall be automatically renewed for a one (1) year period unless, at least sixty (60) days prior to the renewal date, either party gives the other party written notice of its intent not to continue the employment relationship. During any renewal term of employment, the terms, conditions and provisions set forth in this Agreement shall remain in effect unless modified in accordance with Section 8.
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Automatic Renewal. This Agreement shall be renewed automatically for succeeding terms of three (3) years each unless either party gives written notice to the other at least ninety (90) days prior to the expiration of any term of Executive’s or Company’s intention not to renew pursuant to Company’s bylaws.
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Automatic Renewal. This Contract will renew for an additional one year term unless the MCO or the STATE provides notice of termination or non-renewal in accordance with this Article. If the Contract automatically renews for an additional one year term under the current terms pursuant to this section and without a Renewal Contract being entered into between the parties, the STATE shall pay the MCO the rates under this Contract in effect at the time of the automatic renewal, minus any legislated rate reductions. In addition, the Termination Date and Contract Year will advance by one calendar year, unless the MCO has provided the STATE with notice of non-renewal under section 5.2.1.
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Automatic Renewal. This agreement shall be automatically renewed upon like terms for successive calendar year periods.
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Automatic Renewal. SO THAT WE CAN MANAGE YOUR SERVICES EFFECTIVELY AND TO ENSURE SEAMLESS CONTINUITY OF THOSE SERVICES, ALL AGREEMENTS WILL RENEW AUTOMATICALLY FOR SUCCESSIVE PERIODS EQUAL TO THE CURRENT TERM UNTIL BROUGHT TO AN END BY YOU OR US. ALL PERIODS SHALL RUN TO THE LAST DAY OF THE MONTH IN WHICH THEY WOULD OTHERWISE EXPIRE. THE FEES ON ANY RENEWAL WILL BE AT THE THEN PREVAILING MARKET RATE (PRICES ARE SET ANNUALLY SO DEPENDING ON WHEN YOUR AGREEMENT IS DUE TO RENEW, THERE MAY BE A CHANGE IN PRICE). IF YOU DO NOT WISH FOR AN AGREEMENT TO RENEW THEN YOU CAN CANCEL IT EASILY WITH EFFECT FROM THE END DATE STATED IN THE AGREEMENT, OR AT THE END OF ANY EXTENSION OR RENEWAL PERIOD, BY GIVING US PRIOR NOTICE. NOTICE MUST BE GIVEN THROUGH YOUR ONLINE ACCOUNT OR THROUGH THE APP. THE NOTICE PERIODS REQUIRED ARE AS FOLLOWS: Term Notice Period Month-to-Month no less than 1 month’s notice from the 1st day of any calendar month 3 months no less than 2 months’ notice prior to the end of the term More than 3 months no less than 3 months’ notice prior to the end of the term
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Automatic Renewal. If a Holder of such Security has not delivered a Repayment Election for repayment of the Security on or prior to the 15th day following the Maturity Date, and the Company did not notify the Holder of its intention to repay the Security in the Notice of Maturity, then such maturing Security shall be extended automatically for an additional term equal to the original term, and shall be deemed to be renewed by the Holder and the Company as of the Maturity Date of such maturing Security. A maturing Security will continue to renew as described herein absent a Redemption Notice or Repurchase Request by the Holder or an indication by the Company that it will repay and not allow the Security to be renewed in the Notice of Maturity. Interest on the renewed Security shall accrue from the Issue Date thereof, which is the first day of such renewed term (i.e., the Maturity Date of the maturing Security). Such renewed Security will be deemed to have the identical terms and provisions of the maturing Security, including provisions relating to payment, except that the interest rate payable during the term of the renewed Security shall be the interest rate which is being offered by the Company on other Securities having the same term and to Persons holding the same principal amount of Securities as of the Issue Date of such renewal. If other Securities having the same term are not then being issued on the Issue Date of such renewal, the interest rate upon renewal will be the rate specified by the Company on or before the Maturity Date of such Security, or the then existing rate of the Security being renewed if no such rate is specified. If the maturing Security pays interest only on the Maturity Date, then, except as provided in subsection (d) above, all accrued interest thereon shall be added to the principal amount of the renewed Security upon renewal. Notwithstanding the foregoing or anything in Section 2.1(d) to the contrary, if a Repayment Election is given or is due at a time when the Company has determined that a post-effective amendment to the Registration Statement was required but not yet effective, the Company will provide notice to the Holder (including a copy of the post-effective amendment to the Prospectus), and the Holder will be entitled to rescind his or her Repayment Election, if made, or to make a Repayment Election, if not previously made, by delivering a written rescission of the earlier Repayment Election, or a Repayment Election, as the case may be,...
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