Evergreen contracts are the legal slow-burners of the Australian financial landscape. These self-renewing agreements can be found everywhere—from SaaS subscriptions to business equipment leases and even some household utilities. But as consumer protections and regulatory scrutiny ramp up in 2025, it’s crucial for both individuals and businesses to know exactly what they’re signing up for.
What Is an Evergreen Contract?
An evergreen contract is an agreement that automatically renews after each term unless one party proactively cancels. Unlike fixed-term contracts, which end on a set date, evergreen agreements roll on—sometimes indefinitely—unless notice is given. Common examples include:
- Gym memberships that auto-renew monthly
- Commercial office or equipment leases with annual rollovers
- Software and cloud service subscriptions
- Some energy or telco plans
For many Australians, these contracts offer convenience—no more paperwork every year. For businesses, they provide predictable recurring revenue. But they can also create confusion and, if not managed carefully, unwanted financial obligations.
2025 Policy Updates: New Consumer Protections
This year, evergreen contracts are under the spotlight as the Australian Competition and Consumer Commission (ACCC) continues to crack down on unfair contract terms. In November 2023, new laws came into effect, with penalties for businesses using unfair automatic renewal clauses. By 2025, these rules are being actively enforced, with several high-profile cases making headlines.
- Clearer Disclosure: Businesses must now present automatic renewal terms in plain language, upfront, and not buried in the fine print.
- Advance Notice: Companies are required to provide clear notice before a contract auto-renews, typically 30–45 days in advance.
- Easy Cancellation: The law now requires that consumers and small businesses can cancel renewals easily—often online or via email—without jumping through hoops.
- Heavy Penalties: Fines for breaching these provisions can now reach up to $50 million or more, reflecting the government’s tougher stance on consumer rights.
These changes have already forced major gym chains, software providers, and telcos to overhaul their contract processes in 2025. Expect to see clearer emails, SMS reminders, and user-friendly cancellation portals across the board.
Risks and Real-World Examples
While evergreen contracts can be convenient, they also pose risks—especially if you’re not vigilant. Here’s how they can trip up Australians in 2025:
- Forgotten Subscriptions: Australians are spending an estimated $1.9 billion a year on unused subscriptions. Auto-renewals are a major culprit.
- Unintended Lease Extensions: Businesses caught out by unnoticed evergreen clauses have found themselves locked into another year of expensive office leases—costly in a market where remote work remains strong.
- Small Business Squeeze: In 2025, a Sydney café owner made headlines after discovering an evergreen equipment rental had quietly rolled over, costing them thousands in unwanted fees despite not needing the service.
The ACCC’s 2025 enforcement blitz means businesses can no longer rely on inertia, but consumers and business owners must still stay vigilant.
Smart Strategies for Australians
Whether you’re an individual or running a business, here’s how to protect yourself in the new evergreen contract landscape:
- Calendar Reminders: As soon as you sign an agreement, add a reminder 45–60 days before the renewal date to review your options.
- Read the Fine Print: Look for cancellation windows, notice periods, and any auto-renewal clauses—especially now that these must be highlighted.
- Audit Your Subscriptions: Use banking apps or expense trackers to identify recurring payments and cancel anything you don’t need.
- Negotiate Upfront: For business contracts, negotiate shorter renewal terms or explicit opt-in renewals where possible.
- Act Promptly: If you get a renewal notice, don’t delay—some contracts require written notice weeks in advance.
With the new 2025 rules, you now have stronger rights—but only if you use them.
The Bottom Line
Evergreen contracts aren’t going anywhere, but the balance of power is shifting. With tougher penalties and clearer obligations on businesses, Australians are better protected than ever—but complacency can still cost you. Stay alert, use your new rights, and make sure every contract truly works in your favour.
