Contract Clause Library
Renewal clause
Sets the process for extending an engagement into a new term, whether automatic or requiring active agreement from both sides.
Distinct from auto-renewal (which extends by default unless someone opts out), a plain renewal clause requires both parties to actively agree to a new term — useful when an agency wants a natural checkpoint to renegotiate pricing or scope rather than rolling forward silently. It states how renewal is proposed and what, if anything, carries forward from the prior term.
Sample wording
Sample language (illustrative, not legal advice)
This Agreement will terminate at the end of the Initial Term unless the parties execute a written renewal agreement at least 30 days prior to expiration. Any renewal will be on terms to be mutually agreed, which may include revised fees.
Red flags
- Ambiguity about whether this is a true opt-in renewal or functions like auto-renewal in practice
- No stated timeline for when renewal discussions should start, risking a gap between terms
- Silence on what happens to in-progress work if renewal terms aren't agreed before the current term ends
How MarginFlow reads it
MarginFlow tracks the current term's end date and surfaces a reminder as it approaches, distinguishing this clause type from auto-renewal so the alert correctly says "decide whether to renew" rather than "decide whether to cancel."
Related reading