August 8th, 2025
Automatic renewal clauses—commonly referred to as “evergreen clauses”—are widely used in contracts for services, subscriptions, and commercial leases. These clauses automatically renew a contract unless the customer provides written notice of cancellation within a specific period—often 60 to 90 days before expiry. While such clauses are legally permitted, their enforceability is increasingly being challenged under UK contract law and regulatory guidance when they are applied unfairly, without transparency, or without reasonable opportunity for customers to cancel. This article explores the legal and regulatory context surrounding these clauses and provides real-world examples involving LexisNexis and Regus.
Under the Consumer Rights Act 2015 and the Unfair Contract Terms Act 1977, contract terms must be fair, transparent, and not cause a significant imbalance in the rights and obligations of the parties. While these laws apply primarily to consumer contracts, they influence the treatment of small business contracts—especially where there is an imbalance in bargaining power.
The Competition and Markets Authority (CMA) has issued guidance that automatic renewal clauses may be unfair if:
– Customers are not clearly informed of the renewal process.
– The cancellation window is unduly long or unreasonable.
– The customer does not receive a timely reminder before renewal.
In recent years, the CMA has taken enforcement action against companies such as Norton and McAfee for unfair auto-renewal practices. These companies were required to provide clearer cancellation options and refund mechanisms. This regulatory pressure reflects growing concern about the impact of these clauses on both consumers and small businesses.
Legal precedent also supports the argument that such clauses may be unenforceable. In Cavendish Square Holding BV v Makdessi [2015] UKSC 67, the Supreme Court held that contractual penalties must be proportionate to the legitimate interests of the party relying on them. This case is especially relevant where a service provider seeks to enforce an entire year’s fee for a minor technical non-compliance with a notice deadline.
In 2022, a London law firm, a small UK law firm, entered into a two-year subscription with LexisNexis for legal research services. The agreement contained a clause requiring cancellation no later than 90 days before the contract’s expiration. The firm gave notice 80 days prior—only 10 days short of the required notice period.
Despite this, LexisNexis refused to cancel the renewal and demanded payment of over £3,000 for the new annual term. No reminder of the approaching cancellation deadline was issued, nor was the clause highlighted during onboarding. This enforcement of a strict technicality has been challenged as unfair and disproportionate under UK contract principles and CMA guidance.
Similar issues have arisen with Regus, the global serviced office provider. Regus contracts often include automatic renewal clauses with 90-day cancellation periods. Customers have complained that cancellation notices sent even a few days late have resulted in enforced annual renewals and aggressive collection efforts. These terms are rarely emphasised at the time of signing, and reminder notices are not consistently issued.
In some instances, small firms have alleged that Regus failed to process cancellation requests correctly or failed to acknowledge written notices. This has triggered complaints to trading standards and legal challenges on the grounds that the renewal terms are unfair, not transparent, and commercially unreasonable.
Based on CMA guidance and UK case law, automatic renewal clauses may be unenforceable when they:
– Are not clearly disclosed or explained at the time of contract.
– Require unreasonably early notice (e.g., 90 days for a 12-month contract).
– Are enforced without a reminder being sent to the customer.
– Result in substantial financial penalties for minor or technical failures.
In both the LexisNexis and Regus examples, customers acted in good faith and gave substantial notice.
The rigid enforcement of these clauses, without reminders or grace periods, creates an unfair imbalance and may be legally challenged.
The UK legal landscape offers growing support for those challenging automatic renewal clauses. Regulatory action by the CMA and Supreme Court rulings reinforce the need for fairness, proportionality, and transparency. Businesses relying on rigid or unfair renewal clauses risk not only reputational damage but also legal defeat.
Customers—including small firms—should feel empowered to dispute auto-renewals that result in disproportionate loss or were not clearly explained. Legal advice, formal complaints, and regulatory escalation remain powerful tools against such practices.
