ScanMyTerms

Auto Renewal Clause Explained

This page is general information, not legal advice.

An auto renewal clause keeps a subscription or contract running, and billing you, until you stop it. They appear in app subscriptions, software plans, agency agreements and some freelance retainers. The risk is in the details: how much warning you get, how you cancel, whether the price can change, and whether mid-period cancellations are refunded.

Below are real Canva and Spotify examples and one generic version, with fixes to ask for.

1. Renewal every billing cycle

"If you're subscribing to a paid plan your subscription (excluding any one-time payments) will automatically renew each billing cycle, for example, on a monthly or annual basis as applicable. We'll notify you before auto-renewal of your subscription."

Source: https://www.canva.com/policies/terms-of-use/, retrieved 2026-10-29.

Why it works against you

The pre-renewal notice is a useful protection, but the clause doesn't say how far ahead it comes, how it's sent, or what it must say. On an annual plan, one missed reminder can mean a full year's charge. The section's cancellation right points elsewhere, so this clause alone is incomplete. Our Canva terms of use guide covers the rest.

What to ask for instead

Standard consumer terms usually aren't negotiable, but you can check account settings, turn off renewal if possible, and calendar the renewal date. On business agreements, ask for a fixed notice period and delivery method.

Sample wording to propose: "Provider will email Customer at least 30 days before any annual renewal, stating the renewal date, the renewal price, and how to cancel. If this notice is not sent, Customer may cancel within 30 days after the renewal and receive a full refund of the renewal charge."

2. Continues indefinitely until cancelled

"Unless otherwise indicated (for example, if you have signed up for a Prepaid Period), Paid Subscriptions continue indefinitely until cancelled. You will be billed on a recurring basis on the first day of each billing period ..."

Source: https://www.spotify.com/us/legal/end-user-agreement/, retrieved 2026-10-29.

The terms add:

"cancellation will take effect from the end of the billing period in which you cancel ... we do not provide refunds or credits for any partial subscription periods, except as expressly stated in these Terms."

Source: https://www.spotify.com/us/legal/end-user-agreement/, retrieved 2026-10-29.

Why it works against you

"Indefinitely" means you keep paying until you act. Cancelling stops future charges, but you generally can't recover any part of a period already paid for, so a forgotten subscription can quietly charge you for months. Our Spotify terms of use guide covers the rest.

What to ask for instead

Sample wording to propose: "Customer may cancel at any time through account settings or by email. Cancellation takes effect at the end of the current billing period. If Customer cancels within 14 days after a renewal charge, Provider will refund that charge in full."

3. Price changes that apply at renewal

"Price changes will take effect at the start of the next subscription period following the date of the price change and, by continuing to use the Spotify Service after the price change takes effect, you will have accepted the new price."

Source: https://www.spotify.com/us/legal/end-user-agreement/, retrieved 2026-10-29.

Why it works against you

With indefinite renewal, your sign-up price isn't locked in, and continued use counts as accepting a new one. Spotify promises advance notice and lets you reject a change by unsubscribing first, but you must spot that notice and act in time. Broad "changes to terms" clauses work the same way.

What to ask for instead

Sample wording to propose: "Provider may change the subscription price no more than once in any 12-month period, with at least 30 days' written notice. A price increase applies only after Customer confirms acceptance; otherwise the subscription ends at the end of the current period with no further charge."

4. Generic: renewal with a cancellation deadline

Example wording typical of software, agency or retainer contracts (not from any specific company):

"This Agreement will automatically renew for successive twelve (12) month terms unless either party provides written notice of non-renewal at least ninety (90) days prior to the end of the then-current term."

Why it works against you

The most common trap: the cancellation deadline falls well before renewal, so by the time you think about it, it may have passed, locking you into another full term. "Written notice" may also mean a letter to a specific address, not a button or email. If it also has a limitation of liability clause or mandatory arbitration clause, disputing a missed deadline may be harder and costlier.

What to ask for instead

Sample wording to propose: "After the initial term, this Agreement continues month to month. Either party may end it with 30 days' written notice, which may be given by email. Provider will remind Customer of any renewal at least 30 days before the non-renewal deadline."

Freelancers offering retainers face this from the other side; see freelance contract red flags.

Quick checklist before you agree

  • Does the agreement have an end date, or run until you cancel?
  • How far before renewal must you cancel, and how?
  • Will you get a reminder, and how far ahead?
  • Can the price change at renewal, and what counts as accepting it?
  • Are unused partial periods refunded?

Also check nearby clauses, such as a perpetual content license that may outlast cancellation. If unsure what a clause means for you, ask a qualified lawyer.

Scan your own document free

Paste a subscription agreement, service contract or Terms of Service into the ScanMyTerms Terms of Service checker to flag auto renewal and other risky clauses in about a minute, with exact quotes and what to ask for instead. The free preview shows the risk count and first two findings; the full report is a one-time $5 per document. Scan your document free.

This page is general information, not legal advice.

Sources