Automatic contract extension

Information for you as a consumer

• Fixed-term contracts can be renewed automatically

  A contract can be for a fixed term or for an indefinite period. Fixed-term contracts can sometimes include a clause stating that the contract will be automatically renewed if the customer does not terminate it. This is common, for example, in contracts for gym memberships and various subscriptions.

• It is a requirement that you receive a written reminder about the extension

  There are rules on how an auto-renewal of a consumer agreement (evergreen contracts) must be made for it to be valid:

  • The contract must include a clause stating that unless notice to terminate the contract is given, it will be automatically renewed.
  • The company is under an obligation to remind you of this in writing at least one month before the contract is to end. If there is no such clause in the contract, or if the company fails to remind you in time, you have the right to terminate the contract immediately.

  If there is no such contractual condition, you have the right to terminate the contract immediately. The same applies if the condition exists but the company does not remind in time.

  Read the full text of the statute Swedish Consumer Protection with Automatically Renewing Contracts Act on the website of the Swedish Parliament (In Swedish)

• Exceptions when the company is not required to remind you

  The legislation does not apply to contracts that can be terminated within three months. This means that the rules do not apply to for example music streaming or video streaming services that are extended each month for one month at a time.

• Negative option contract

  Automatic contract renewal should not be confused with the practice of “negative option contracts”, where there is no initial contract between you and the company. Such practice is not legally permitted in Sweden. The law requires that for a party to be bound by a completely new contract, they must actively accept it. It is forbidden for companies to have contracts where the other party must actively decline or refuse in order not to be bound to something.

• Cancelling the contract

  Companies cannot require you to terminate the contract in any one specific manner, for example by telephoning. You can choose the method that best suits you, but it is always advisable when cancelling a contract to do it in writing. If the need later arises, you have documentation you can present to prove that you have cancelled the contract. You can for example send an e-mail message as notice of cancellation. If you send a letter by post, you should keep a copy or take a photo of the letter, and send the letter by registered post. Ask the company to send you an acknowledgement that they have received your notice of cancellation.

  Make sure when you contact the company that you are clear about what you want to do, especially if you have several different subscriptions or services with the same company.

• Special rules for telecom agreements

  In the Electronic Communications Act, there are special rules regarding automatic contract extensions for fixed-term agreements. The law is also supplemented by regulations from the Swedish Post and Telecom Authority (PTS). Many telecom agreements, such as mobile subscriptions and internet contracts, are covered by these regulations.

  The law states that you always have the right to terminate the extended contract with a maximum notice period of one month. You should only pay for the service during the notice period, with no additional fees.

  According to PTS regulations, your operator is obliged to inform you well in advance before the contract is extended. You should receive the information on a durable medium, such as email. It should include details on how to terminate the contract.

  About the regulations on the PTS website (In Swedish)

• Request the assistance of ARN if you can’t arrive at a mutually agreed solution with the company

  If you and the company cannot reach an agreement, you can file a complaint to the public authority the National Board for Consumer Disputes (ARN).

  ARN will assess your case and make a recommendation on how to resolve the dispute. Most companies follow ARN’s recommendations.

  A normal processing time is approximately six months.

  What does it cost to file a complaint with ARN?

  It costs SEK 150 to file a complaint with ARN. When you submit your complaint, you can request that the company compensates you for the cost if ARN makes a recommendation in your favour.

  Requirements for ARN to consider your case

  • The company has either rejected your claims or has not responded within a reasonable time.
  • The amount you and the company are in dispute about is more then ARN's value limitations (different value thresholds apply for different fields). You cannot include the application fee to ARN.
  • You file the complaint within one year from the first time you complained to the company.

  Submit an application on ARN’s website