Subscriptions have become a popular business model in France. In 2024, the average French person had three subscriptions and spent €780 on them per year. The model’s main principle is automatic renewal, where no action is needed for a contract to continue when it expires. This model is used across many industries.

For businesses, this approach is a direct way to ensure steady revenue. However, the legal framework has become more stringent since the Chatel law of 2005 and subsequent laws that have strengthened consumer protections.

In this article, we explain the rules governing automatic subscription renewals, their use cases, the advantages and disadvantages for French businesses, and how to draft renewal clauses.

Key takeaways

• Automatic renewal lets a subscription continue after its initial term ends, while still giving the customer the right to opt out under the conditions and deadlines set out in the contract.
  
• For consumers and nonprofessionals, businesses must anticipate each renewal by informing customers of their right to refuse it, in accordance with specific timing and formal notification requirements.
  
• The applicable rules depend on the customer: individuals benefit from specific legal protections, while business-to-business (B2B) relationships rely more heavily on contractual terms and the principles of the French Civil Code.
  
• Automatic renewal helps secure recurring revenue and simplify subscription management, but poor customer communication can lead to cancellations, refunds, penalties, and payment disputes.
  
• Reliable implementation requires clearly defined commitment periods, proof of customer consent, automated notifications and billing, and a compliant, easily accessible cancellation process.
  

What are automatic renewals?

Automatic renewals are legal mechanisms in which fixed-term subscription contracts renew upon expiration without the customer taking action or signing a new agreement. As long as neither party objects to the contract’s contents, it renews automatically and billing continues as before.

Article 1215 of the Civil Code covers automatic renewals: “If, at the expiration of a fixed-term contract, the parties continue to perform their obligations, the contract shall renew automatically. This shall produce the same effects as renewing the contract.” Under Article 1214, unless otherwise stipulated, renewed contracts become open-ended.

This mechanism is based on contractual provisions and general conditions of sale (CGV), which stipulate the initial duration, renewal conditions, and the objection period. Unless stated otherwise, the rules in the Civil Code apply.

What is the legal framework for automatic renewals in France?

These arrangements are permitted in the country, but they are subject to strict rules—including the 2005 Chatel law, the 2014 Hamon law, and the 2022 purchasing power law—when dealing with individuals and nonprofessionals. B2B contracts are mostly governed by the Civil Code and the contract itself, within the limits of Articles 1210 to 1215 of the Civil Code.

Here is the legal framework governing automatic renewals in France:

Automatic renewals for individuals and nonprofessionals

Automatic renewals of contracts with individuals and nonprofessionals are governed primarily by three laws. The 2005 Chatel law requires businesses to provide required notices ahead of expiration, the 2014 Hamon law specifies the form that information must take, and the 2022 purchasing power law requires businesses to let customers cancel contracts online if they signed them electronically.

Chatel law

The Chatel law—law no. 2005-67 of January 28, 2005—requires businesses to provide specific disclosures. For fixed-term service contracts with automatic renewal clauses, businesses must inform customers in writing that they are entitled to refuse automatic contract renewal one to three months before the end of the renewal objection period.

Hamon law

The Hamon law—law no. 2014-344 of March 17, 2014—determines the form of the information required by the Chatel law. The notification must be sent in a dedicated email or a personal letter addressed to the customer. It must be written in plain language, and the deadline for refusing renewal must be displayed clearly in a box.

The law also allows customers to cancel automotive and home insurance contracts and product warranties—governed by the Insurance Code—any time after the first year.

Purchasing power law

Law no. 2022-1158 of August 16, 2022 on emergency purchasing power protection measures introduced a new option for terminating agreements electronically.

Article L215-1-1 of the Consumer Code states that contracts signed electronically must be easily cancellable online and at no cost. This obligation also applies to subscription contracts offered by businesses that allow customers to enroll online on the cancellation date—including those who initially signed in person.

Automatic renewals of B2B contracts

The Chatel law does not apply to B2B contracts. Freedom of contract and Articles 1210 to 1215 of the Civil Code govern automatic renewals, which prohibit open-ended contracts. The Commercial Code also penalizes power imbalances and sudden terminations of commercial relations.

When do businesses use automatic renewals?

Autorenewing subscriptions work best for services used regularly, where interruption would harm customers. They suit fixed-term contracts whose value to the customer increases over time and where manual renewals create unnecessary friction.

Here are some cases where automatic subscription renewals are useful:

Activities requiring uninterrupted service

Automatic renewals help when subscriptions are used continually and a few days of disruption would directly harm customers’ activity.

Subscriptions whose value increases over time

The more data, history, and customizations that subscribers accumulate in using the service, the more important contract continuity becomes. This functional dependency on the service makes automatic renewals a natural fit.

Fixed-term contracts with extra perks

In business relationships where perks and discounts are granted in exchange for a commitment to a specified duration, autorenewal helps prolong the relationship without renegotiating agreements each time.

Repeat services

If services remain the same from one period to the next, this approach avoids manually extending agreements with the same terms.

High subscriber volumes

Manual renewals are impractical for businesses with thousands of contracts. Automation becomes necessary and needs to cover tasks such as billing and sending the notices required by the Chatel law (to individuals and nonprofessionals) before contracts expire.

What types of subscriptions and contracts can include automatic renewal clauses?

Most recurring fixed-term contracts can include automatic renewal clauses. The rules that apply depend on the customer and the contract type. The Chatel law applies to service contracts with individuals and nonprofessionals, while the Civil and Commercial Codes govern B2B contracts.

Here are some examples of contract types that typically include automatic renewal clauses, and the rules that apply:

What are the advantages to businesses of automatic renewals?

Automatic renewals effortlessly extend customer relationships and keep recurring revenue steady and predictable. They also prevent satisfied customers from leaving simply because they forgot to renew, and eliminate the administrative tasks required for each cycle. When managed properly, this approach can drive growth for subscription-based businesses.

Here are the primary benefits of automatic renewals:

Steady, predictable revenue

When a contract continues without intervention, revenue increases without additional sales or marketing effort. Businesses know in advance when contracts expire. This means they can anticipate collections and manage recurring monthly and annual revenue. By extending customer relationships, automatic renewals improve the customer acquisition cost-to-lifetime-value ratio.

Fewer cancellations due to forgetfulness

Without automatic renewals, some satisfied subscribers might lose access simply because they forget to renew their contracts on time. Such renewals eliminate this risk and let businesses focus on retaining customers who are actually dissatisfied.

Lighter administrative load

This approach eliminates the need for reminders, new contracts, and new signatures for each renewal. When paired with invoicing software that manages recurring billing—such as Stripe Billing—automatic renewals simplify sending invoices and collecting payments.

What are the disadvantages of automatic renewals for businesses?

These arrangements carry strict legal obligations and penalties for violations. If managed poorly, they can erode customer trust. They also don’t replace real retention strategies and require reliable tools to track expiration dates and send notifications.

Here are the main drawbacks of automatic renewals:

Strict information obligations

Commercial relationships with individuals and nonprofessionals require businesses to send customers personalized expiration notices, informing them of their right to decline renewal and the deadline for doing so. These notices must be sent between one and three months before the end of the objection window.

Without automation or notification tracking, errors can pile up, especially when customers have different deadlines.

Clear contract clauses

Poorly written automatic renewal clauses might be deemed unfair to individual customers or create power imbalances in B2B contracts. Also, if a renewed contract doesn’t stipulate a term, it might become an open-ended contract under common law.

If that happens, either party can terminate the agreement as long as they meet the contractual requirements for advance notice. If no notice period is provided for, they must give reasonable notice.

Fines for violations

If mandatory disclosures are missing, individual and nonprofessional subscribers can cancel their subscriptions for free any time after the renewal date. Advance payments made afterward must be refunded within 30 days, minus fees for services performed. Otherwise, amounts owed must bear interest at the legal rate.

Violating the online cancellation obligation in Article L215-1-1 could result in administrative fines of up to €15,000 for individuals and €75,000 for companies.

Harm to image and reputation

Unexpected debits can make customers feel scammed, causing them to post negative reviews and claims online, report charges to the SignalConso consumer protection bureau, and file chargebacks. These negative reactions can quickly damage a business’s reputation.

More payment disputes

If subscribers don’t understand how renewals work, the business could face nonpayment, rejected debits, and disputed card payments. These incidents generate charges and additional processing fees that can add up.

How to draft automatic renewal clauses

To draft automatic renewal clauses, businesses must define the agreement’s parameters, write clear language in their CGV, obtain express consent at enrollment, send automatic notifications before contracts expire, and offer simple cancellation methods.

Here is a step-by-step guide to drafting these provisions:

1. Identify the customer type: Determine whether customers are individuals, nonprofessionals, or professionals. This distinction determines which legal obligations apply.

2. Define the parameters of the agreement: Determine the initial duration, length of each subsequent period, and renewal objection period.

3. Write clearly: The provisions must explicitly state that the contract will continue automatically and describe how to decline an extension. The writing must be clear and straightforward so customers can understand the consequences of automatic renewal. If the contract does not specify the term of the renewed version, it becomes an open-ended contract that either party can cancel at any time, as long as they provide advance notice as specified in the contract or within a reasonable period.

4. Include mandatory legal notices: Service contracts governed by Articles L215-1 to L215-3 and L241-3 of the Consumer Code must quote the articles in full, as required by Article L215-4.

5. Obtain express consent: Clearly present renewal clauses to customers before they sign contracts. Businesses must also retain proof that subscribers accepted the applicable contractual conditions during enrollment. If contracts are signed online, businesses can obtain consent by having customers check a dedicated box to indicate acceptance of the CGV.

6. Automate Chatel notifications: For individuals and nonprofessionals, businesses must send personal letters or dedicated emails between one and three months ahead of the objection period. Messages must display the deadline clearly in a box. Keep copies of sent messages as proof.

7. Offer simple cancellation methods: Businesses offering online enrollment must also offer simple, direct, no-cost ways to cancel, followed by a confirmation message.

8. Synchronize invoicing: Configure systems to send recurring bills and trigger payment on renewal dates. They must also send automatic reminders if payments fail.

9. Track data and adjust: Track renewal rates, churn, and payment disputes to identify subscribers at risk of leaving and adjust business strategies accordingly ahead of expiration. Review the CGV and notification templates annually.

How Stripe Billing can help

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FAQs about automatic subscription renewals in France