Q&As

Are there any restrictions or limitations on the use of automatic renewal provisions in business-to-business and business-to-consumer contracts?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 15/04/2019

The following Commercial Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • Are there any restrictions or limitations on the use of automatic renewal provisions in business-to-business and business-to-consumer contracts?
  • Automatic renewal clauses
  • B2C contracts
  • Summary

Are there any restrictions or limitations on the use of automatic renewal provisions in business-to-business and business-to-consumer contracts?

Automatic renewal clauses

Automatic renewal clauses may take a variety of forms to the following effect:

  1. indefinite agreement subject to notice—“This Agreement shall continue in force for a period of [three] years from the commencement date. Upon the expiry of such period, the agreement shall continue in force until either party serves notice to terminate the Agreement in accordance with the provisions of clause [x] in which case this Agreement shall terminate [sixty] days from the date of such notice”

  2. indefinite renewals subject to notice—“This Agreement shall be renewed automatically for successive terms of two years unless either party serves notice in writing to the other at least [sixty] days prior to the expiration of any term”

  3. renewal for fixed period subject to notice—“Upon the expiry of the initial term, this Agreement shall be automatically renewed for a period of [two] years, unless at least [sixty] days prior to the renewal, either party gives notice in writing to the other of its intention to terminate the Agreement”

B2C contracts

Unlike business-to-business (B2B) contracts, business-to-consumer (B2C) contracts containing automatic renewal clauses will be subject to all laws and regulations dealing with consumer protection, see: Trading with consumers—overview.

Such clauses will have to be considered fair in accordance with Part 2 of the

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