# Auto-renewal

Source: https://contracko.com/glossary/auto-renewal

# Auto-renewal

A clause extending a contract automatically unless a party opts out in time.

## Definition

An auto-renewal (or evergreen) clause automatically extends a contract for further periods unless a party gives notice within a set window. It ensures continuity but can trap parties who forget to cancel. Dutch consumer-protection rules (Wet Van Dam) heavily restrict silent renewal and long lock-ins for consumer contracts, requiring easy cancellation after the first renewal.

## Example

> A gym membership renews for another year automatically; under the Wet Van Dam, after the first term it must instead become monthly cancellable.

## Why this is a business risk

Auto-renewal clauses generate significant hidden cost for businesses that do not actively manage their contract portfolio. A SaaS subscription, office lease, or outsourcing contract that rolls over unnoticed can commit a company to another year of spend at rates that have since become uncompetitive. On the revenue side, suppliers rely on auto-renewal to retain customers who have disengaged.

## How to manage it

- Log every auto-renewal clause and its notice window at the time of signing, not when the window is about to close.
- Set renewal review reminders at least 90 days before the notice deadline to allow time for evaluation and renegotiation.
- For B2B contracts, negotiate a mutual right to prevent renewal with reasonable notice rather than a one-sided auto-renewal that only benefits the supplier.

### How Contracko helps

Preventing unwanted auto-renewals is one of the most immediate ways Contracko saves money. It extracts renewal dates and notice windows from every contract and sends timely reminders to the responsible colleague, so the decision to renew or exit is always made consciously and on time.

## Legal references

- [BW 6:236 sub j Dutch Civil Code: silent renewal of consumer contracts Dutch law](https://wetten.overheid.nl/BWBR0005289)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Telecommunications](https://contracko.com/industries/telecommunications)[Software & SaaS](https://contracko.com/industries/software-saas)[Insurance](https://contracko.com/industries/insurance)[Retail & Wholesale](https://contracko.com/industries/retail-wholesale)

## Related clauses

- [Renewal and Notice Period Clause](https://contracko.com/clause-library/renewal-and-notice)
- [Termination for Convenience Clause](https://contracko.com/clause-library/termination-for-convenience)
- [Notices Clause](https://contracko.com/clause-library/notices)

## Related terms

- [Notice period](https://contracko.com/glossary/notice-period)
- [Term (duration)](https://contracko.com/glossary/term)
- [Termination](https://contracko.com/glossary/termination)

### Never miss a contract deadline again

- AI finds renewal and notice dates
- Risks and obligations are surfaced automatically
- Reminders help you act before dates slip

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## Frequently asked questions

Common questions about this term.

- **Q:** Are auto-renewal clauses always allowed?
  **A:** Between businesses, generally yes. For consumer contracts the Wet Van Dam restricts them: after the first renewal the consumer must be able to cancel monthly with short notice.

- **Q:** Can a business accidentally agree to an auto-renewal it did not want?
  **A:** Yes. If the party continues to perform or receive services after the expiry date without objecting, Dutch courts may find that a new contract has arisen by conduct on the same or similar terms.

- **Q:** How much advance notice is typically required to prevent auto-renewal?
  **A:** It depends on the contract; common windows range from 30 to 90 days before the renewal date. Some contracts have a very narrow window (e.g. 30 days) buried in the boilerplate, making vigilance essential.

- **Q:** Can an auto-renewal clause change the price on renewal?
  **A:** Only if the contract expressly provides for it (e.g. a price-indexation clause). A silent renewal without a price-change mechanism generally continues on the existing terms.

- **Q:** What is the Wet Van Dam and why does it matter?
  **A:** The Wet Van Dam (2011) amended BW 6:236 to restrict auto-renewal in consumer contracts. After the first renewal, consumers must be able to cancel at any time with a maximum of one month's notice. It applies to subscriptions, memberships, and similar ongoing services.

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