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, 2015 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, 2015 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, 2015 at 16:17
  • @Terry why is it more reasonable under this law that a contract automatically renews rather than continues?
    – Calchas
    Nov 28, 2015 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, 2015 at 13:34

1 Answer 1


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.

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