Contract Renewal Proposal
What they got last term, what changes, and what it costs to carry on.
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| For | [customer] |
| Service | [what is being renewed] |
| Current term | [date] to [date] |
| Proposed on | October 14, 2026 |
1. What the last term delivered
| Measure | Result |
|---|---|
| [add one measure per line] |
2. What changes
[add one change per line]
3. Price
| Amount | |
|---|---|
| Current price | $ [amount] |
| Renewal price | $ [amount] |
| Change | [enter both prices] |
4. To accept
Sign below and return one copy before [date]. If we have not heard from you by then the service continues on the current terms for 30 days while we talk, and stops after that unless renewed.
What is a Contract Renewal Proposal?
A renewal proposal is what you send before a contract term ends, setting out what the customer had, what changes, and what carrying on will cost. It exists because renewals are decisions, not defaults — someone has to approve the spend again, often a person who was not there when it was first bought. Sent late, or not at all, it turns into a cancellation notice arriving from the other direction.
Account managers in software, maintenance, facilities, insurance, staffing and retained services all send them, typically ninety to a hundred and twenty days before the term ends so there is room to negotiate before any notice deadline. The audience has usually changed since the original sale. Assume the sponsor has moved on and that a procurement or finance reviewer is now involved, comparing your renewal against a market they have just been asked to test on price alone.
Automatic renewal is regulated differently around the world. The US has federal rules on negative-option marketing and a growing set of state automatic renewal laws with their own disclosure and cancellation requirements; the UK and EU apply consumer rules to rolling contracts; Australia's unfair contract terms regime reaches standard form small business contracts, with thresholds that have changed in recent years. If your agreement rolls over unless cancelled, check the current requirements for the customer's location before relying on silence, and confirm what notice your own contract demands.
The proposal does not renew anything. The term extends only when the mechanism in the contract operates — a signed order form, a variation, or an automatic rollover that has not been cancelled in time. It is also not a legal notice: if your agreement requires written notice of a price change by a set date, sending a proposal does not satisfy that unless it says so and goes to the address the contract names. And it cannot undo a cancellation the customer has already served.
What to put in a Contract Renewal Proposal
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Business name | For example: Barton Supply Co. |
| Your address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Customer name | For example: Halliwell Interiors Inc. |
| Customer address | For example: 44 High Street, Columbus, OH 43215 |
| What is being renewed | For example: Standing stock allocation and next-day delivery |
| Current term started | Free text |
| Current term ends | Free text |
| What they got out of the last term | One per line: Measure | Result |
| What changes on renewal | One per line |
| Current price | For example: 1,92,000 per year |
| Renewal price | For example: 2,04,000 per year |
How to write a Contract Renewal Proposal
Restate the term and the notice deadline
Open with the contract reference, the current term end date and the date by which either side must give notice. Customers frequently do not know their own deadline, and a renewal conversation that begins after it has passed is a bad conversation. Putting the dates at the top protects you as well: it shows on the record that you raised it in time.
Show what they actually used
Set out the usage, tickets, visits, seats or volumes from the term now ending, next to what they paid for. This is the strongest part of the document because it is not an argument, it is their own data. Where usage was low, deal with it directly and propose a smaller package. Ignoring obvious under-use reads as though you hoped nobody would check.
State the change and the reason
If the price is going up, say by how much, from when, and why — an index-linked uplift in the contract, a change in scope, a support tier they have moved into. Vague references to rising costs invite a line-by-line challenge. If a clause in the existing agreement governs the increase, quote the clause number so finance can verify it without calling you.
Offer options rather than a single figure
Give two or three routes: the same scope for twelve months, a longer term at a better rate, or a reduced package matching actual usage. Options change the question from whether to renew into which one, and they give a procurement reviewer something to negotiate against other than your headline number. Show the total commitment for each, not only the monthly figure.
Name the decision date and the mechanism
Close with the date you need a decision, what the customer must sign or issue, and who to send it to. If a purchase order is required, say what it must reference. Then confirm what happens if nothing arrives — the contract rolls over, or service ends on the term date. Either is workable; being unclear about which is not.
Common mistakes
- Sending the proposal after the notice deadline has passed, which leaves the customer feeling trapped by a rollover rather than persuaded by a case.
- Announcing a price increase with no reference to the clause or the reason behind it, which turns a routine renewal into a full procurement review.
- Ignoring low usage the customer can see in their own dashboard, which destroys the credibility of everything else in the document.
- Addressing the proposal to the original buyer who left eighteen months ago, so it sits unread in a mailbox nobody monitors.
- Treating the renewal as a formality and skipping the value summary, then having nothing to point at when a new finance director asks what this line is for.
Frequently asked questions
When should I send a renewal proposal?
Work back from the notice deadline in the contract, not from the term end date. Ninety days before that deadline is a common target for annual business contracts, leaving room for a usage review, an internal approval cycle and a round of negotiation. For large or multi-year agreements, start six months out. For small monthly contracts, thirty days is usually enough.
How do I justify a price increase at renewal?
Tie it to something the customer can verify: a contractual uplift clause, a documented change in scope or volume, or a tier they have grown into. Show the previous and new figures side by side with the difference stated plainly. Where the increase reflects general cost movement, say so once and move on — repeated justification reads as an invitation to negotiate it away.
What is the difference between a renewal proposal and a renewal notice?
A notice is a contractual communication: it tells the other party that the term is ending, that you intend to renew, or that a price is changing, and it must follow the form and timing the contract sets. A proposal is a commercial document that makes a case. You can combine them, but if you do, check that the notice requirements are genuinely met.
Should I offer a discount to secure a renewal?
Only in exchange for something — a longer term, a larger scope, a reference, earlier payment. An unreciprocated discount teaches the customer that the price falls if they hesitate, which makes every subsequent renewal harder. If the account is genuinely at risk on price, a reduced package matching their actual usage is usually a better answer than the same package for less money.
What happens if the customer misses the renewal deadline?
That depends entirely on the contract: some agreements roll over automatically for a further term, some lapse, some continue month to month. Read the clause before telling the customer anything, and be aware that in several jurisdictions consumer and small business protections limit how automatic rollovers may operate. If you intend to rely on a rollover, confirm the position with your legal adviser first.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.