A subscription agreement is a contract between you and a service provider that spells out what you're paying for, when you pay, and what happens if either side wants to stop

Whether you're setting up a subscription business or signing one as a customer, the written agreement is what prevents misunderstandings later. It covers the basics — price, billing cycle, cancellation terms — and protects you if something goes wrong. If you're a homeowner with a subscription service (lawn care, pest control, pool maintenance), having this in writing means you know exactly what you're getting and what it costs. If you're offering a subscription service, it means customers can't claim they didn't know the terms.

The agreement doesn't have to be long or complicated. It needs to be clear, specific, and signed by both parties before the first charge goes through.

Key Takeaways

  • A subscription agreement must state the exact price, billing date, and frequency — monthly, quarterly, annually — with no room for guessing.
  • Include how the customer cancels, how much notice they need to give, and whether they get a refund for unused time.
  • Spell out what service or product is included and what isn't, so disputes don't happen later.
  • Both parties should sign and date the agreement, and each should keep a copy before any money changes hands.
  • If you're the service provider, include a clause about what happens if payment fails and how many times you'll retry the charge.

What goes in the opening section

Start with the date the agreement takes effect and the names of both parties — the service provider and the customer. Be exact: use legal business names, not nicknames. If you're a sole proprietor, use your full legal name. If you're an LLC or corporation, use the registered name.

Then state what service or product is being provided. Don't write "lawn care services." Write "weekly lawn mowing, edging, and leaf blowing on the property at [address], April through November." The more specific you are, the fewer arguments you'll have later about what was promised.

The price and billing section

Write the exact dollar amount the customer pays per billing cycle. Include whether that price covers tax or if tax is added on top. State the billing cycle — every month on the 15th, quarterly in advance, annually on January 1st — with enough detail that both parties know when the next charge hits.

Say how the customer pays: credit card, bank account, check, or another method. If payment is automatic, state that clearly and say the customer authorizes the recurring charge. Include what happens if a payment fails — for example, "If the first charge fails, we will retry on the 5th and 12th of the month before suspending service."

If the price can change, say so and explain how much notice you'll give. For example: "Price may increase with 30 days' written notice. Current price is $50 per month." If the price is locked for a set time, say that too: "Price is fixed at $50 per month for the first 12 months."

Cancellation and refund terms

State exactly how the customer cancels — by email, phone call, online portal, or written notice. Give a specific email address or mailing address if that's required. Say how much notice they need to give: "Cancellation takes effect at the end of the current billing cycle if notice is given at least 7 days before the next charge date."

Be clear about refunds. Most subscription agreements don't refund unused time, but you need to say that. For example: "No refunds are issued for partial months. If you cancel on the 20th of a 30-day cycle, your service continues through the end of the month and no refund is due." If you do offer prorated refunds, explain the math: "Refunds are calculated as the daily rate times the number of unused days."

Include what happens to the customer's data or account when they cancel. If you delete their information after 30 days, say so. If they can reactivate within a certain window, state that.

What's included and what's not

List what the subscription covers. If you're providing a service, describe the scope: frequency, location, hours of operation, any limits on the work. If you're selling a product, describe what the customer receives and how often.

Then list what's not included. For a lawn care subscription, that might be: "Does not include tree trimming, stump removal, or debris hauling." For a software subscription: "Does not include technical support or custom integrations." This section prevents customers from assuming extras are covered.

If there are optional add-ons available, mention them and their cost. This gives the customer a clear path to upgrade without renegotiating the whole agreement.

Liability and dispute resolution

Include a sentence limiting your liability. For example: "Service provider is not liable for damages exceeding the amount paid in the current billing cycle." This protects you if something goes wrong, though it won't shield you from gross negligence or fraud.

State how disputes are handled. You can require the customer to contact you in writing first, give you 30 days to respond, and then agree to mediation before either side sues. This keeps small disagreements out of court.

If you're in a state that allows it, you can include an arbitration clause requiring disputes to go to arbitration instead of court. Make sure this is clear and not buried in fine print, or a court may not enforce it.

Term and renewal

Say whether the subscription renews automatically or ends after a set period. If it renews automatically, state that clearly: "This subscription renews automatically every month unless cancelled by the customer." If it's a fixed term that ends, write: "This subscription is for 12 months beginning [date] and ends on [date]. It does not renew automatically."

If there's an early termination fee, state it. For example: "If cancelled before 12 months, customer pays a $50 early termination fee." Make sure this fee is reasonable and clearly disclosed, or a court may refuse to enforce it.

Signatures and copies

End with a line for both parties to sign and date. Print or write the full legal name of the person signing below their signature. If the customer is a business, the person signing should have authority to bind that business — usually an owner or manager.

Make two copies: one for the customer and one for you. Both parties should sign both copies. Each keeps one. Don't start charging until both signatures are on the agreement and both parties have a signed copy in hand.

If you're doing this digitally, use a service like DocuSign or Adobe Sign that creates a timestamped record of when each party signed. This is legally stronger than an email exchange and easier to prove later if there's a dispute.

Frequently Asked Questions

Do I need a lawyer to write a subscription agreement?

For a simple, straightforward subscription, you don't. Use a template from your state's small business office or a legal template site, fill in your specific terms, and have both parties sign. If your subscription involves high dollar amounts, complex services, or you're concerned about liability, a lawyer's review is worth the cost — usually $200 to $500 for a simple agreement.

Can I change the agreement after we've already started?

You can propose changes, but the customer has to agree. Give written notice of the change and a date it takes effect — usually at least 30 days out. If the customer doesn't accept, they can cancel without penalty. Don't just start charging a new price or changing terms without permission; that's a breach of contract.

What if the customer refuses to sign?

Don't provide the service. An unsigned agreement means you have no written proof of what was promised, and disputes become much harder to resolve. If a customer won't sign, they're signaling they don't agree to your terms, so don't move forward.

Should I include a non-compete clause?

Only if it's reasonable and you have a legitimate business reason. A non-compete that prevents a customer from using a competitor's service is usually unenforceable. A non-compete that prevents an employee from starting a competing business in your area for a set time is more likely to hold up, but courts scrutinize these closely.

What if I'm the customer signing a subscription agreement?

Read the whole thing before you sign. Pay special attention to the cancellation terms, refund policy, and auto-renewal language. If anything is unclear, ask the provider to explain it in writing. Don't sign if you don't understand the terms or disagree with them — that signature binds you to the agreement as written.