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Budget Cuts and Automatic Renewals

Writer's picture: David CohenDavid Cohen

Every quarter or during budget cuts, my procurement colleagues would walk into my office with that calm but desperate look on their face.


“Hey David… One of our SaaS subscriptions just auto-renewed for another year. We don’t need it anymore, and it’s really expensive. How do we get out of it?”

Without even glancing at the agreement, I knew the answer: there was no termination during the annual term, and we probably missed the 3-month advance notice period to stop the renewal.


So, we had no choice but to accept it and made sure everyone set reminders for next year.


Auto-renewal clauses can be sneaky. They’re often buried deep in the contract, easy to miss if you’re not trained to spot them.


As a buyer-side attorney, it’s your job to flag these renewal clauses and any automatic price hikes.


They weaken your bargaining position at the next renewal and become a costly burden.


If you can’t avoid auto-renewals, push for the ability to renegotiate or exit without high fees.


That alone could save your company thousands.


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