Automatic renewal

Typical wording

The agreement renews automatically for a further twelve (12) months unless terminated in writing no later than three (3) months before expiry.

What it means

If you do not give notice in time, you are locked into another full period. The notice has to arrive before the deadline, not before the expiry date.

Common practice

Automatic renewal is common. Notice periods of 1-3 months before expiry are normal for annual agreements; 6 months or more is onerous.

What to look for

• By which date must the notice actually be given?
• How long is the new period?
• Must the notice be in writing, or go through a particular channel, to be valid?
• Can the price change at the same time as the renewal?

Source