Why is it often said in contracts that they renew automatically every year, instead of just saying that the contract is for an unlimited time duration?

  • 1
    Are you able to clarify what type of contract you're talking about?
    – Pat W.
    Nov 26 '15 at 13:25
  • 1
    If you are from the UK there is a law which says that a contract must be reasonable, and one that lasts forever would be harder to persuade someone that it is reasonable. What is your jurisdiction?
    – Terry
    Nov 26 '15 at 14:55
  • My jurisdiction is Israel, but that does not matter. I ask about a few contracts which I found in Internet (and don't remember their jurisdiction). They are probably termed "Terms of Service"
    – porton
    Nov 26 '15 at 16:17
  • @Terry why is it more reasonable under this law that a contract automatically renews rather than continues?
    – Calchas
    Nov 28 '15 at 6:37
  • Dependant on what the contract covers it can be cancelled within a grace period, so it gives time to sort it out.
    – Terry
    Nov 28 '15 at 13:34

The only year-based constraint that comes to mind for US contracts, is that any contract that will last longer than the span of a year has to be a written contract (cannot be oral). Contracts can and do certainly last longer than a year. In many contractual circumstances, it's appropriate to have a periodic assessment or "escape hatch" that either party can use to politely and reasonably unwind their position...and a calendar year is a convenient signpost.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.