Automatic renewal contracts, also known as rollover contracts, are agreements where a service or subscription is renewed automatically at the end of the initial term without the need for the customer to take any action. While these contracts are convenient for both the service provider and the customer, they can also raise concerns about their enforceability.

In the UK, the enforceability of automatic renewal contracts is governed by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which came into force on 13 June 2014. These regulations apply to contracts between a trader and a consumer, and their aim is to ensure that consumers are fully informed about the terms of the contract they are entering into, and that they have the right to cancel the contract if they wish.

Under the regulations, automatic renewal contracts are enforceable in the UK, but they must meet certain requirements. Firstly, the contract must clearly state that it is a rollover contract and inform the customer of the total cost of the renewal period. Secondly, the contract must provide the customer with a means of cancelling the contract before the renewal period begins, either by providing a notice period or by allowing the customer to opt-out of the renewal.

If the contract does not meet these requirements, it may be considered unfair or misleading and therefore unenforceable. The Competition and Markets Authority (CMA), which is responsible for enforcing consumer protection law in the UK, has taken action against a number of companies in recent years for using automatic renewal contracts that did not comply with the regulations.

For example, in 2018 the CMA launched an investigation into the use of such contracts by online dating companies. It found that some companies were not providing clear and prominent information about the automatic renewal, or were making it difficult for customers to cancel their subscriptions. As a result, several companies agreed to change their practices and provide clearer information to customers.

In summary, automatic renewal contracts are enforceable in the UK, but they must comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. These regulations require the contract to clearly state that it is a rollover contract, inform the customer of the total cost of the renewal period, and provide a means of cancelling the contract before the renewal period begins. Failure to comply with these requirements may result in the contract being considered unfair or misleading and therefore unenforceable. As a professional, it is important to ensure that any content related to automatic renewal contracts includes accurate and up-to-date information about their legality and compliance requirements.