An evergreen plan is a contract that renews itself automatically at the end of each term unless one party gives notice to cancel within a specified window. Silence equals agreement to another term. Whether you’re legally stuck in one depends on three things: whether the renewal clause was disclosed clearly enough that you noticed it, whether you actually consented to it, and whether the cancellation process the contract describes is realistic to use. If any of those pieces is missing, the clause may not be enforceable at all.
How the Automatic Renewal Works
At the end of the current term, the contract rolls into a new one on the same terms unless the party who wants out acts first. The renewal period is usually a fixed length like one year, though some agreements roll month to month indefinitely until someone cancels. The structure flips the default of a normal contract: instead of both sides having to agree to continue, you stay locked in unless you speak up on time.
This shows up everywhere. Software subscriptions, commercial leases, equipment maintenance agreements, gym memberships, and countless consumer services use it. For the provider, it guarantees continuity of revenue. For the customer, the risk is getting trapped in a contract that renewed before anyone remembered to review it. That tension is why courts and legislatures scrutinize these clauses closely.
When an Evergreen Clause Is Actually Enforceable
The starting requirement is mutual assent. Both parties must genuinely agree to the automatic renewal provision at the time the contract is formed. A signed contract containing an evergreen clause buried on page 14 in eight-point font may not satisfy that standard, even if the signature itself is valid.
The legal test is “conspicuousness.” Under the Uniform Commercial Code, a term is conspicuous if it is written or displayed in a way that a reasonable person ought to have noticed it. That can mean larger type than surrounding text, contrasting font or color, bold formatting, or placement near the signature line. The question is whether the clause stands out from the rest of the agreement, not whether it technically appears somewhere in the document.
In consumer agreements, courts apply the standard aggressively. An auto-renewal clause that blends into a dense block of boilerplate is vulnerable to challenge. In business-to-business contracts, courts give more credit to the sophistication of both sides, but conspicuousness still matters. Even between experienced commercial parties, a renewal provision that requires forensic reading to discover can be found unenforceable.
The FTC Click-to-Cancel Rule
The Federal Trade Commission’s click-to-cancel rule, which took effect in 2025, governs evergreen and auto-renewing consumer agreements nationwide and sets a floor no business selling to consumers can fall below.1Federal Trade Commission. Federal Trade Commission Announces Final Click-to-Cancel Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships
The rule prohibits sellers from four things. Material terms about automatic renewal cannot be hidden; they must be clearly and conspicuously disclosed before any billing information is collected. Sellers must obtain the consumer’s express informed consent to the auto-renewal feature specifically, not just overall acceptance of the contract. The cancellation mechanism has to be at least as simple as the enrollment process, so a service you signed up for online in two clicks cannot require a phone call or certified letter to leave. And any material misrepresentation about the recurring charge, renewal period, or cancellation process violates the rule.
Before this rule, consumers depended entirely on a patchwork of state laws, and many states had no auto-renewal statute at all. A business that complies with the federal rule still has to comply with any stricter state law, but consumers in states without their own protections now have a baseline.1Federal Trade Commission. Federal Trade Commission Announces Final Click-to-Cancel Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships
State Laws That Go Further
Many states have their own auto-renewal statutes that layer additional disclosure, consent, and notice requirements on top of federal law. The details vary, and a clause enforceable in one state may be void in another.
California
California’s Automatic Renewal Law, Business and Professions Code Sections 17600 through 17606, is among the strictest in the country. “Clear and conspicuous” is defined with specificity: renewal terms must appear in larger type than surrounding text, in contrasting type, font, or color, or be set off by symbols that call attention to them.2California Legislative Information. California Code BPC 17602
Businesses must obtain the consumer’s affirmative consent to the auto-renewal terms specifically, present those terms in visual proximity to the consent request, and provide a post-purchase acknowledgment that includes the renewal terms, cancellation policy, and instructions for how to cancel. If the offer includes a free trial, the acknowledgment must explain how to cancel before charges begin.3State of California – Department of Justice – Office of the Attorney General. Attorney General Bonta Issues Consumer Alert on California’s Automatic Renewal Law
The penalty is unusually sharp. Any goods shipped to a consumer without proper affirmative consent are deemed an unconditional gift. The consumer can keep or discard them with no obligation whatsoever, including no responsibility for return shipping.4California Legislative Information. California Code Business and Professions Code 17603
New York
New York takes a different approach. General Obligations Law Section 5-903 targets contracts for service, maintenance, or repair of property, and it covers business-to-business agreements as well as consumer ones.5New York State Senate. New York General Obligations Law 5-903 – Automatic Renewal Provision of Contract for Service, Maintenance or Repair Unenforceable by Contractor Unless Notice Thereof Given to Recipient of Services
The law puts the burden on the service provider. Before the customer’s cancellation deadline, the provider must send written notice, served personally or by certified mail, reminding the customer the auto-renewal exists. The notice has to arrive at least 15 days but no more than 30 days before the deadline. If the provider fails to send it, the automatic renewal clause is unenforceable. The statute does not apply to contracts with renewal periods of one month or less.5New York State Senate. New York General Obligations Law 5-903 – Automatic Renewal Provision of Contract for Service, Maintenance or Repair Unenforceable by Contractor Unless Notice Thereof Given to Recipient of Services
The Broader Trend
California and New York are not outliers. Minnesota, Utah, and Massachusetts enacted or updated their own auto-renewal statutes in 2024 and 2025, with others introducing legislation. Requirements differ in detail but share common themes: clear pre-purchase disclosure, affirmative consent, pre-renewal reminders, and easy cancellation.
UCC Rules for Contracts Involving Goods
When an evergreen clause appears in a contract for the sale of goods, the Uniform Commercial Code adds a layer of protection. UCC Section 2-309 addresses contracts of indefinite duration, which is exactly what an evergreen clause creates. Such a contract is valid for a reasonable time but may be terminated by either party at any time, unless the parties clearly agreed otherwise.6Legal Information Institute (LII). UCC 2-309 – Absence of Specific Time Provisions; Notice of Termination
Termination requires “reasonable notification,” which depends on industry norms, the nature of the goods, and how much time the other party needs to make alternative arrangements. Any agreement that eliminates the notification requirement entirely is invalid if enforcing it would be unconscionable. A contract cannot use an evergreen clause to trap a buyer in a perpetual goods purchase with no realistic exit.6Legal Information Institute (LII). UCC 2-309 – Absence of Specific Time Provisions; Notice of Termination
Military Servicemember Protections
Active-duty military members have a federal override that can cut through evergreen clauses in certain contracts. The Servicemembers Civil Relief Act, 50 U.S.C. ยง 3955, lets servicemembers terminate residential and motor vehicle leases early when they enter military service, receive permanent change-of-station orders, or deploy for 90 days or more.7Office of the Law Revision Counsel. 50 USC 3955 – Termination of Residential or Motor Vehicle Leases
The protection extends to a spouse or dependents on the lease. To exercise it, the servicemember delivers written notice of termination with a copy of the military orders, by hand, private carrier, or U.S. mail with return receipt requested. For monthly leases, termination takes effect 30 days after the next rent payment is due following delivery. The contract’s own termination terms, including any evergreen clause, do not override these federal protections.7Office of the Law Revision Counsel. 50 USC 3955 – Termination of Residential or Motor Vehicle Leases
How to Terminate an Evergreen Agreement Properly
If the clause is valid, getting out requires precise execution. Missing a single procedural step almost always locks you into another term, regardless of your intent. Three things matter: timing, delivery method, and content.
Timing is where most terminations fail. Contracts typically require notice 30, 60, or 90 days before the renewal date. Missing that window by one day usually binds you to the next full term. Calendar the deadline well in advance and treat it like a filing deadline with no extensions.
The delivery method must match what the contract specifies. If the agreement requires certified mail, an email will not satisfy the requirement even if it reaches the right person. Many contracts require a specific delivery channel such as certified mail, a designated electronic portal, or registered post. Whatever method you use, keep proof of delivery. A certified mail receipt or electronic confirmation eliminates later disputes about whether notice was given.
The content has to be unambiguous. Reference the specific contract by name, number, or date. State clearly that you are exercising your right not to renew. Vague language about dissatisfaction or wanting to “revisit terms” is not a termination notice, and courts have consistently held as much. Keep it short: “This letter serves as notice of non-renewal of [Contract Name] dated [Date]. The contract will not renew at the end of the current term expiring on [Date].”
What Happens When the Clause Fails
When a court or regulator finds that an evergreen clause does not meet enforceability standards, the clause is typically struck while the rest of the contract survives. The practical effect is that the contract expires at the end of its current term with no automatic renewal, and the party relying on the renewal loses its ability to hold the other side to another cycle.
The consequences for the business can go further. Under California law, goods or services provided under an improperly formed auto-renewal are treated as unconditional gifts, so the business cannot collect payment for them.4California Legislative Information. California Code Business and Professions Code 17603 Under New York law, failure to send the required pre-renewal reminder makes the renewal provision unenforceable, freeing the customer to walk away even after the cancellation deadline has passed.5New York State Senate. New York General Obligations Law 5-903 – Automatic Renewal Provision of Contract for Service, Maintenance or Repair Unenforceable by Contractor Unless Notice Thereof Given to Recipient of Services At the federal level, FTC enforcement actions for click-to-cancel violations can result in civil penalties and mandatory consumer refunds.
If a vendor is insisting you’re locked in for another year, these are the standards to check first: how the clause was disclosed, how you consented, and whether the cancellation path you were offered matches the one you were promised when you signed up.