# Contracts

## Overview

**Subscription contract period** capabilities provide an increased level of control over the evolution and lifecycle of subscriptions sold to your customers, on top of billing cycles. Adding a contract period to a subscription means that you can configure subscriptions that:

* Renew a number of times during a contractual period after which the contract is automatically restarted, unless customers opt-out;
* Renew a number of times during a contractual period after which the contract expires causing the subscriptions it governs to be disabled and blocking customers from renewing, either automatically or through manual payments.

## Availability <a href="#availability" id="availability"></a>

Contact 2Checkout directly if you wish to start using contracts for your subscriptions.&#x20;

## Requirements <a href="#requirements" id="requirements"></a>

**Subscription contract period** functionality can be used only in conjunction with products for which subscriptions are generated.

Contract settings impact only active subscriptions.

## Create a subscription contract period <a href="#create-a-subscription-contract-period" id="create-a-subscription-contract-period"></a>

To create a subscription contract period, follow the steps:

1. Go to ***Setup*** > [Products](https://secure.avangate.com/cpanel/products.php).
2. Ssearch and find the product for which you want to define a subscription contract
3. Click **Edit**.
4. Select the **Billing cycle** specific for the subscriptions generated for the product from the list of options available under the **Billing cycle** drop down men&#x75;**. Note:Subscription contract period** is not available when the **one time fee** option is selected / for evergreen subscriptions.
5. Configure **the Contract period** in months.

## Contract period options <a href="#contract-period-options" id="contract-period-options"></a>

There are two subscription contract periods:

1. **Unlimited** - When this option is selected, **Contracts** have no impact on the billing cycle or the lifecycle of subscriptions. Essentially, subscription with the billing cycle set to 1 month will be renewed on a monthly basis indefinitely is the Contract option selected is unlimited.
2. **Limited to \[number of months] -** When this option is selected, the **Contract** limits billing cycles to the number of months you configure.

Use this option to define the period of time the subscription can be renewed, according to the billing cycles configuration, per contract agreed with your customers. In addition, you can also set the outcome of the Contract expiration, by choosing one of two options:

1. **Automatically renews** - 2Checkout renews the **Contract** automatically at the end of the contract period defined with the same value (if it was not modified), unless customers choose to not prolong the agreement, by opting out of the contract. **Contracts** restart when subscriptions are renewed for the first time past the duration of the old contract. If the value of the **Contract period** is modified, it will only impact new subscriptions sold. Existing subscriptions move under the new **Contract** when they renewed for the first time past the period of the old contract.
2. **Expires -** the **Contract** expires at the end of the contract period defined. When **Contracts** expire the subscriptions they govern also expire automatically, and will not be switched to the manual renewal model. Customers will not be given the chance to prolong their agreement and the life of the subscription. The 2Checkout system will not send out emails to let customers make payments manually to renew subscriptions and their **Contracts**.

## Editing contract settings

**Contract period** settings for a product can be edited at any time. However, the new contract period set will only impact new subscriptions sold to customers. Existing subscriptions will continue to be governed by the same contract as when they were first sold, until the contract is automatically renewed or expires. When subscriptions are renewed, 2Checkout swapes the period parameters of the old contract for the current contract settings defined.

## Subscription upgrades

For an upgrade from Product A to Product B, where both products have contract settings the expected behavior for the subscription is to switch start a new contract cycle according to Product's B settings.

<table><thead><tr><th width="114"></th><th width="113">Product A</th><th width="113.0001220703125">Product B</th><th>Subscription after upgrade from Product A to Product B</th></tr></thead><tbody><tr><td><strong>Contract</strong></td><td>Yes</td><td>Yes</td><td>Yes (Product B Contract period settings)</td></tr><tr><td>​</td><td>No</td><td>Yes</td><td>Yes (Product B Contract period settings)</td></tr><tr><td>​</td><td>Yes</td><td>No</td><td>No (Product B Contract period settings)</td></tr><tr><td>​</td><td>No</td><td>No</td><td>No (Product B Contract period settings)</td></tr></tbody></table>

## Renew with new product version <a href="#renew-with-new-product-version" id="renew-with-new-product-version"></a>

1. When renewing with a new product version, from **Product A** to **Product B**, where **Product A** has no contract settings and **B** has contract settings, the expected behavior for the subscription is to start a contract on Product B's Contract settings.
2. When renewing with a new product version from **Product A** to **Product B**, where **Product A** nd **Product B** both have contract settings, the expected behavior for the subscription to have its contract period swapped to the **Product B** Contract settings the first time it's renewed past the Contract period of **Product A**.
3. If the contract for **Product A** is set to expire, then subscriptions will work only until contract expiration deadline, after which they will be disabled, regardless if the contract settings of **Product B**, in the context of a renewal with a new product version.

## Trials <a href="#trials" id="trials"></a>

Contracts for products for which you're offering free or paid trails to your customers only start impacting subscriptions after evaluation versions converted to paying products.

## Shopper emails for contracts <a href="#shopper-emails-for-contracts" id="shopper-emails-for-contracts"></a>

In concert with **Subscription contract period** feature, you can control emails 2Checkout sends to customers. Two options are available to send shopper emails:

1. For each **Billing cycle period -** Customers  continue to receive emails according to the setup in place and your strategy to communicate subscription renewals and charges. Messages include:
   * Renewal notifications
   * Order confirmations
   * Payment receipts
2. At the end of the **Subscription contract period -** Emails are sent to customers only at the end of the subscription contract period. When this option is selected, the 2Checkout system blocks all emails from being sent to the customers using the subscriptions of the product impacted by this configuration. As such, customers will not receive:
   * Renewal notifications;
   * Order confirmations;
   * Payment receipts.

**Send shopper emails each billing cycle period:**

* The 2Checkout system sends emails to shoppers each billing cycle for limited contracts that are set to automatically renew.
* The 2Checkout system sends emails to shoppers each billing cycle except the last, after which subscriptions are disabled for limited contracts that are set to expire.

**Send shopper emails each subscription contract period:**

* The 2Checkout system send emails to shoppers when they first purchase the subscription and at the end of the last billing cycle of the contract period as well as the first time they renew after the contract is restarted for limited contracts that are set to automatically renew.
* The 2Checkout system send emails to shoppers only when they first purchase the subscription for limited contracts that are set to expire.

## Manual renewal messages <a href="#manual-renewal-messages" id="manual-renewal-messages"></a>

Send shopper emails each:

* **Billing cycle period:** shoppers continue to receive manual renewal notifications ahead of the next upcoming expiration deadline as long as they manually renew their subscription.
* **Subscription contract period:** shoppers do not receive manual renewal notifications.

## FAQ <a href="#faq" id="faq"></a>

<details>

<summary><strong>What happens when the contract period is not a multiple of billing cycles?</strong></summary>

* If the contract period is not a multiple of billing period, for example a 7 months contract for a subscription set to renew every 3 months, then the 2Checkout system will allow subscriptions to be renewed either automatically or manually only as long as the contract period is not exceeded. For example, in the scenario of a 3 months billing cycle subscription governed by a 7 months contract there will be only 2 billing cycles/ contract, after which the contract auto-renews or expires, according to the settings you configured.

</details>


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