Potential Legal Aspects of Automatically Renewable Contracts

There’s a reason lawyers drive nice cars. It’s because contracts can be confusing and mistakes are expensive. One minute you’re reviewing next quarter’s IT budget, and the next, you’re staring at a vendor invoice for a tool no one uses…renewed for another 12 months. Suddenly, you have to pull in legal and procurement to combat a vendor who is insisting the language in the renewal speaks for itself. You’ve gotten yourself into a bad spot. 

If your team isn’t actively tracking contract terms, renewal dates, and cancellation windows, you’re not just wasting money, you could be walking into legal quicksand. Let’s break down some potential – and often hidden - dangers of automatic renewals and explore how BetterTracker can help you stay in control.  

Real-World Example: When Auto-Renewal Crosses the Legal Line 

Consider the case of Bloomberg vs. Bruce Ovitz, which shows how automatic renewals can land even big companies in legal hot water. Bloomberg had a data subscription contract with Ovitz that renewed automatically every two years. But when Ovitz tried to cancel after the deadline, Bloomberg claimed the contract had already renewed—locking him in for two additional years.  

Ovitz sued and under New York’s General Obligations Law, vendors must notify customers in writing about upcoming renewals at least 15 days before the cancellation deadline. Bloomberg failed to send that notice, and as a result, the court deemed the auto-renewal unenforceable. Bloomberg ultimately had to drop its claim for early termination fees.¹ 

The takeaway? State laws vary widely, and in places like New York, even B2B agreements can be voided if proper renewal notice isn’t given. In the end, staying on top of contract and subscription renewals needs to be a priority for any business. 

The Legal Landmines Lurking Around Automatic Contract Renewals 

1. You Might Be Locked In (Even If You Forgot to Agree) 
Many vendor contracts include automatic renewal clauses, which can quietly commit you to another year or longer, if you don’t cancel within a specific timeframe. Miss the deadline, and you’re stuck paying for services you may no longer want or need. 

2. Lack of Clarity = Legal Trouble 
A surprising number of SaaS and vendor agreements bury their renewal language deep in the fine print. Some don’t clearly state when or how you need to cancel. That lack of transparency can leave your business liable for fees or even legal fees, should you dispute a charge after the auto-renewal kicks in. Be sure to review all language carefully at the start of any contract period. Or, better yet, have a lawyer or contract expert do the review.  

3. Termination Procedures Are a Maze 
Have you ever tried to cancel a contract that requires 60 days’ notice… in writing… by registered mail… sent to a specific address listed on page 19 of an appendix? The point is, some companies don’t always make it easy to stop using their product and this ambiguity can create costly confusion and drawn-out legal disputes. 

4. Misunderstandings Can Land You in the Courtroom 
Disputes over what was “reasonably communicated” or “properly terminated” are common in renewal cases. If your team isn’t tracking contracts and their terms carefully, a simple mistake could escalate into a complex legal conflict. And when lawyers get involved, the cost isn’t just their billable hours, it’s also lost time, added stress, and plenty of frustration.  

You Don’t Need a Better Lawyer, You Need a BetterTracker 

BetterTracker helps companies take control of their SaaS spend management, contracts, subscription renewals, and vendor agreements - all in one centralized platform. No more missed dates. No more ambiguous contract terms. No more surprise renewals. 

By using BetterTracker, you can: 

• Monitor renewal timelines proactively, with alerts sounding well in advance. 
• Uncover duplicate or unused SaaS subscriptions that are draining your budget. 
• Store all contracts and terms in one searchable place, so your team is always in the know.
• Avoid legal pitfalls by ensuring every renewal is intentional and on your terms. 

Don’t Let a Missed Renewal Become a Legal Emergency 

The average hourly rate for an attorney is $275 an hour. And while automatic renewal clauses aren’t going away, the right tools can help ensure unwanted renewals don’t catch you off guard.  

Can BetterTracker help you avoid costly contract renewal surprises? Will it help protect your IT budget? You be the judge. Schedule a free demonstration today. 

BetterTracker helps finance, IT, and operations teams take control of contracts, subscriptions, and technology spend. By centralizing renewals, eliminating tech sprawl, and providing real-time visibility, BetterTracker empowers businesses to simplify compliance, reduce costs, and make smarter decisions. 

¹Source: www.nge.com/news-insights/publication/contract-auto-renewals-not-necessarily-so-automatic-as-recent-ny-case-demonstrates/