Reading auto-renewal clauses before you sign a maintenance contract
What to look for in auto-renewal clauses on Australian supplier and maintenance contracts before signing.
A childcare operator in Ipswich discovered their grounds maintenance contract had rolled for a third year at a 6% uplift because nobody sent the 60-day non-renewal notice. The clause was on page nine. The operations coordinator who signed the original agreement had left eighteen months earlier.
What to check
Notice period. 30, 60, or 90 days before anniversary is typical. Diarise the deadline in the same system you use for licence renewals.
Renewal term length. Some contracts renew for another full year; others renew month-to-month after the initial term. The exit cost differs sharply.
Price escalation on renewal. Fixed increase, CPI-linked, or “at supplier’s discretion” — the third option deserves a pushback or a cap.
Assignment on change of ownership. If you sell the business, does the contract transfer or terminate? Buyers and sellers both get caught here.
Practical habits
- Maintain a contract register with start date, end date, notice deadline, and owner internally
- File signed PDFs in one shared location, not individual inboxes
- When you intend to exit, send notice by email and registered post if the clause specifies written notice
We review these clauses during negotiation support engagements and flag renewal traps before you are locked in. For a broader look across all facility vendors, pair this with a Supplier Review Audit.