renewal

1) Voluntary re-establishment of a legal relationship created by a previously agreed-to but expired contract . That is, renewal is not merely an extension of a previous contract but is effectively the creation of a new contract that recreates the previous and now-renewed contract. (However, in reality, “renewal” is commonly used synonymously with extension.) Renewal provisions are often found in leases , promissory notes , or insurance policies. Parties may contract to have renewal provisions occur automatically after a period of time, or to require that one party gives notice of their intent to renew the contract.

As with all contracts, a renewal provision requires consideration to be effective. If the original contract contains the renewal provision, then the consideration provided for the original contract renders the renewal provision effective. If parties seek to subsequently renew the contract where no renewal provision existed in the original contract though, they must provide new consideration. The consideration, however, can take whatever form the parties accept. To illustrate in the context of a lease renewal, a California Court of Appeals case, Simons v. Young , explained that “[s]o long as lessee paid consideration for the option to renew, and there is no question but that he did, the size, amount or nature of the consideration is irrelevant.”

2) The re-filing of a motion which the court initially denied or stayed. For example, Federal Rule of Civil Procedure Rule 50 allows parties to renew a motion for judgment as a matter of law 28 days after the trial.

[Last reviewed in April of 2021 by the Wex Definitions Team ]

Wex

• COMMERCE
• commercial activities
• contracts
• wex definitions