State Automatic Renewal Laws

What are state automatic renewal laws?

Automatic renewal laws regulate contracts that renew unless someone cancels. They often require the seller to disclose the renewal terms clearly, get consent, send reminders or make canceling easy. About 30 states have automatic renewal or negative option laws, according to Jones Day. A negative option is any deal where silence or inaction counts as saying yes.

The key question for a SaaS buyer is who the law protects. Many of these rules are written for consumers. New York City's new click-to-cancel rule, effective October 1, 2026, covers subscriptions offered to New York City consumers, per the rule itself. A law like that does nothing for your company when it buys software.

A few laws do reach business contracts. One example is New York's General Obligations Law section 5-903, which works like this.

Section 5-903 covers contracts for service, maintenance or repair of real or personal property that renew automatically for a set period. It protects any "person," which the section defines to include corporations. It does not apply when the renewal period is one month or less.

1. The contract has a deadline by which you must give notice that you will not renew.
2. At least 15 and no more than 30 days before that deadline, the provider must send you written notice, in person or by certified mail, pointing out the renewal clause.
3. If the provider skips that notice, the renewal clause cannot be enforced against you.

Whether a given SaaS contract counts as a service contract under this section is a legal question. Do not plan on it.

What it looks like in a vendor's terms

A typical clause reads like this:

Your subscription renews automatically for successive terms equal to the initial term, at our then-current prices, unless either party gives notice of non-renewal at least 30 days before the end of the current term. Fees are non-refundable.

• Renews automatically: doing nothing means another full term. See auto-renewal clause.
• Then-current prices: the price can change at renewal. See renewal price increase.
• Notice of non-renewal: your cancel deadline comes before the renewal date. See notice of non-renewal.
• Non-refundable: canceling late does not get your money back.

HubSpot's terms are a real example: the subscription "will automatically renew," and you stop it by turning off the auto-renewal setting before the current term ends.

A real change we caught

Venpo flagged that the GoDaddy refund policy now excludes most renewals. From October 15, 2026, for customers who got its September 15 notice email, GoDaddy says it "does not offer refunds on renewals (manual or auto-renewal)," apart from listed exceptions or where the law requires one. Once renewals are not refundable, missing a cancel deadline costs you the full renewal.

Why it matters to you

The safety net may not be there. If you assume a state law will force a reminder, you may miss a deadline that no law protects. Federal rules work the same way. The Restore Online Shoppers' Confidence Act protects consumers who buy online. The FTC took the position that its broader click-to-cancel rule covered business deals too, but a federal appeals court struck it down in July 2025 before it took effect. See FTC click-to-cancel rule.

The rules may change. In its March 2026 call for comments, the FTC asked whether business-to-business deals between sophisticated companies should be exempt from any new rule, per the FTC's notice. As of October 2026, no new federal rule has been adopted.

Your contract is your real protection. You can negotiate a shorter renewal term, a longer notice window, a cap on increases or a written reminder before renewal, and those promises bind the vendor whatever state law says. For many SaaS purchases, the notice period, price terms and refund rules in your agreement decide what happens.

What to check

• The renewal term length and whether it matches the original term or resets to one year.
• The non-renewal notice period and how notice must be given.
• Whether prices can rise at renewal, and how much notice the vendor gives.
• Whether renewal fees are refundable if you cancel late.
• If New York law governs your contract, whether it could fall under section 5-903 and whether the vendor sent the required notice. Ask a lawyer before relying on it.
• Every renewal deadline is on your renewal calendar with a reminder.

How Venpo helps

Venpo watches your vendors' terms, billing terms and refund policies and emails you a plain-English alert when renewal, price or cancellation language changes. The Fine Print Scan also answers, for each vendor, whether it can raise prices.