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Two years, one month, done - except that is a German rule

There is no general cap on how long an American contract may tie you in. What the law limits instead is the surprise, and only in some states and some industries.

by · Published · 5 min read

“Minimum term 24 months, renews for a further 12, three months' notice” is a sentence that stopped being enforceable in Germany in 2022. Readers who arrive here from that article should know straight away that the American answer is different, and weaker in the part that matters most: there is no general rule capping how long a consumer contract may run, and no general rule turning an expired term into a monthly one.

What is limited instead

Not the length - the surprise. California's Automatic Renewal Law requires a business to send a renewal notice where the consumer “accepted an automatic renewal offer or continuous service offer with an initial term of one year or longer, that automatically renews”[1]. That notice must state that it renews unless cancelled, “the length and any additional terms of the renewal period”, what it will cost, and “one or more methods by which a consumer can cancel”[2]. The contract may still run for years. It may just not run for years quietly.

Where a term limit does exist, it is industry by industry

California caps health studio contracts, and only those: “A contract for health studio services may not require payments or financing by the buyer to exceed the term of the contract, nor may the term of the contract exceed three years”[3]. Three years, against the German general limit of two - and it applies to gyms, not to your phone, your software or your magazine. That is the shape of American consumer contract law in one example: specific protections for the industries that generated enough complaints, rather than one rule covering continuing obligations as a class.

Why this is money and not lawyering

An automatic annual renewal is the single reason people keep paying for contracts they stopped wanting: you miss the window, and you are in for another twelve months. Where the renewal notice is required, the window comes to you. Where it is not, the window is a date you agreed to a year ago and have not thought about since - which is why the calendar entry below is worth more than knowing any of the law above.

Run your own case

This calculation runs on our server and is not stored – neither your result nor your entry.

Worth doing. $600 per hour for 30 minutes of work.

Currently per year $600
New per year $300
Saving per year $300
Switching bonus, one-off $0
Switching cost, one-off $0
In the first year $300
Your hourly rate for this $600

Assumptions behind this calculation

  • Above this hourly rate we call a switch worthwhile. That is our judgement, not a measurement.: $50
  • A switching bonus counts in the first year only. Folding it into the annual saving promises it every year.

A contract at $49.99 a month against an available $24.99 is $300 a year. If a term still has months to run, that saving does not start today - but it tells you what the remaining term is costing you, which is the number worth having before deciding whether to buy your way out of it.

Where this article stops

This describes published law and is not legal advice. It covers one state's automatic renewal statute; others differ, several have their own, and the federal position is unsettled after the FTC's click-to-cancel rule was vacated in July 2025[4]. If a company is holding you to a term you think is unenforceable, your state attorney general's consumer protection office takes complaints and costs nothing.

What you can do about it

  1. Find the renewal date and put it in a calendar today

    It is in the confirmation email from whenever you signed up. Set a reminder for a month before it, not on it. This is the whole defence, it works regardless of which state you are in, and it takes about two minutes for each contract.

  2. Read the notice period, not just the term

    The term says when you could leave. The notice period says by when you must say so, and it is the part that quietly costs people a year. Where a health studio contract is concerned, California limits that notice period to 30 days; elsewhere, read what you agreed to.

  3. Price the exit before you assume you are stuck

    An early termination fee is a number, and the remaining term is a number. Sometimes paying the fee and switching is cheaper than serving out the term, and the calculator above will tell you which. It is worth working out rather than assuming, because the assumption is almost always that you are trapped.

  4. Keep the renewal notice when one arrives

    Where the law requires one, its absence is itself a fact worth having on record. Save it. If a dispute follows about whether you were told, a saved notice - or a demonstrable lack of one - is the whole argument.

Frequently asked

Is there really no maximum contract length in the United States?

There is no general one. Specific statutes cap specific industries in specific states - health studios in California being the clearest example - and that is a different thing from a rule covering continuing contracts as a class. If somebody tells you a term is “illegal” without naming the statute and the state, treat it as an opinion.

Does a renewal notice have to arrive before I am charged?

The statute sets out what the notice must contain and when it is triggered; the timing details, and which of two overlapping notice duties applies, are in the section itself, and it is worth reading rather than being paraphrased here. The practical point stands either way: a notice you can produce later is worth keeping, and one that never arrived is worth noticing.

Why does this article keep talking about California?

Because it has the most developed statute and the clearest wording, which makes it the honest place to show what American protection looks like when it exists. It is not a claim that it applies to you. Where you live decides that, and the article says so rather than leaving you to assume.

This article is not legal advice.

Sources

  1. California Business and Professions Code § 17602(b)(2): a renewal notice is required where the consumer accepted an offer with an initial term of one year or longer that automatically renews, California Legislative Information, retrieved August 27, 2026.
  2. California Business and Professions Code § 17602(a)(8): the notice must state that the service renews unless cancelled, the length and additional terms of the renewal period, the costs, and one or more methods of cancellation, California Legislative Information, retrieved August 27, 2026.
  3. California Civil Code § 1812.84(a): a contract for health studio services may not exceed three years, and a termination notice period in the contract may not exceed 30 days, California Legislative Information, retrieved August 27, 2026.
  4. Rule Concerning the Use of Prenotification Negative Option Plans, Advance Notice of Proposed Rulemaking, 13 March 2026: the Eighth Circuit vacated the amended Negative Option Rule on 8 July 2025, Federal Trade Commission, via the Federal Register (document 2026-04952), retrieved August 27, 2026.

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