Desired result

Renewal of a license can be a great way to lock in prices at a rate lower than what the publisher could charge through unchecked yearly increases, and to streamline your procurement process so as to avoid the burdens of annual renegotiation. On the flip side, you may not be able to or want to encumber future funds by committing to costly resources, particularly for new resources whose usage and usefulness you’ve not yet been able to gauge. In addition, if your agreement contains a “semi-automatic renewal” clause (discussed below), failing to provide timely notice of your intention to discontinue licensing the product may lock you into another year. For these reasons and more, you’ll need to consider carefully whether you want renewal to occur until you provide notice that it should stop, or whether you want to affirmatively opt-in to renew without it occurring automatically.

What it means / tricks & traps

Renewals extend the agreement beyond its initial expiration or termination date. They may be semi-automatic or optional, and there are pros and cons to each:

• A semi-automatic renewal clause renews the agreement automatically for a defined period of time or number of periods unless or until a party provides notice of non-renewal (or termination). These types of renewals can be advantageous for publishers who wish to keep libraries “locked in” to future years of payments, especially as the renewal clause often builds in automatic price increases at a set rate. Semi-automatic renewals can also be advantageous for libraries when: (a) libraries wish to avoid the administrative burden of repetitive procurement processes, as it saves them the time and energy of having to submit annual renewal requests for much-used resources; and (b) libraries desire the security of constrained or known future price increases rather than the volatile and unchecked increases that can come through renegotiation. However, it can also be disadvantageous for libraries that experience funding changes but who are locked into at least another period of renewal if they failed to provide timely notice of termination.

• An optional renewal clause in an e-resource license agreement requires libraries to send a notice of intention to renew to the publisher or vendor within a prescribed period of time prior to the agreement’s expiration. If a library does not send the notice, the agreement terminates according to its terms. Optional renewal clauses can benefit libraries concerned about unstable future funding streams, or libraries trialing new resources whose usage and utility must be assessed. However, optional renewals may create headaches for libraries without robust administrative processes in place that flag renewal deadlines—leaving agreements to inadvertently lapse because the library failed to submit a notice of intent to renew in time.

There is no single approach appropriate for all scenarios. Generally speaking, libraries are well-served by evaluating renewal language on a resource-by-resource basis.

Desired language

This agreement shall be renewable at the end of the current term for a successive one (1) year term unless either party gives written notice of its intention to cancel thirty (30) days before expiration of the current term.  In the event of a price increase for a subsequent term as provided for in Section III, Licensee shall have no less than sixty (60) days from the date of notification of the price increase to notify Licensor of Licensee’s intent to cancel or renegotiate.