Contract terms

Subscriptions can run indefinitely or they may run for a fixed number of billing cycles. Subscription can have "contract terms", which define a lock-in period on the subscription for a certain number of billing cycles. This prevents the subscription from being canceled by the customer when it is within the contract term.

The contract term resource described below defines the properties of this lock-in period. This includes the number of billing cycles, the total contract value, the action to be taken at the end of the contract term, and so on. To allow for exceptions, you also have the option of terminating an active contract term and charging a termination fee.

A contract term starts in the active state and ends in the completed state. If the contract was canceled due to non-payment or other reasons, it can end in the canceled or terminated state. A given contract term is always associated with one, and only one subscription. A subscription, however, can be associated with only one active contract term. Over time, a subscription can be associated with several non-active contract terms. The active contract term for a subscription is available as an object within the subscription.

To enable and configure contract terms, follow these steps in the Chargebee UI:

Click Settings on the left navigation.
Click Configure Chargebee.
Under Billing, click Contract Terms.
Enable and configure the feature as needed.

Once contract terms have been configured, the following actions can be performed using the API:

Define a contract term for a subscription and set renewal options for the contract term. The following endpoints support this:
Create a subscription
Update a subscription
Reactivate a subscription
Create a subscription ramp
Update a subscription ramp
Retrieving a historical record of all contract terms for a subscription can be done via the following endpoint:
List contract terms for a subscription
Canceling a contract term can be done via the following endpoints:
Update a subscription
Cancel a subscription
Update a subscription ramp

Including a termination fee

When a contract is canceled mid-term, you can set a termination fee to be levied. Here's how:

Create an item price for an item of type charge with price set to the termination fee.
Do one of the following:

Attach the charge-item to a plan, setting the charge_on_event parameter to contract_termination. OR
Include the charge-item price on a subscription, setting the subscription_items[charge_on_event][i] parameter to contract_termination.

Once the above steps are done, the termination fee will be charged automatically if you terminate the contract in the middle of its term.

Sample Contract termJSON

Contract terms attributes

required, string, max chars=50

Id that uniquely identifies the contract term in the site.

status

required, enumerated string

Current status of contract

active

An actively running contract term.

completed

The contract term has run its full duration.

cancelled

The contract term was ended because: - a change in the subscription caused a subscription term reset.

the subscription was cancelled due to non-payment.

terminated

The contract term was terminated ahead of completion.

contract_start

required, timestamp(UTC) in seconds

The start date of the contract term

contract_end

required, timestamp(UTC) in seconds

The end date of the contract term

billing_cycle

required, integer, min=0

The number of billing cycles of the subscription that the contract term is for.

action_at_term_end

required, enumerated string, default=renew

Action to be taken when the contract term completes.

renew

Contract term completes and a new contract term is started for the number of billing cycles specified in contract_billing_cycle_on_renewal.
The action_at_term_end for the new contract term is set to renew.

evergreen

Contract term completes and the subscription renews.

cancel

Contract term completes and subscription is canceled.

renew_once

Used when you want to renew the contract term just once. Does the following: - Contract term completes and a new contract term is started for the number of billing cycles specified in contract_billing_cycle_on_renewal.

The action_at_term_end for the new contract term is set to cancel.

total_contract_value

required, in cents, default=0, min=0

The sum of the totals of all the invoices raised as part of the contract term. For active contract terms, this is a predicted value. The value depends on the type of currency. If the subscription was imported with the contract term, then this value includes the value passed for total_amount_raised .

total_contract_value_before_tax

required, in cents, default=0, min=0

It refers to the total amount of revenue that is expected to be generated from a specific contract term, calculated as the sum of all invoices raised during the term, regardless of payment status. It is based on past performance and the specified currency in the contract. If the subscription was imported, the value for total_amount_raised_before_tax is included in the calculation of the total contract value before tax. It's important to note that this value excludes any applicable taxes.

cancellation_cutoff_period

optional, integer

The number of days before contract_end , during which the customer is barred from canceling the contract term. The customer is allowed to cancel the contract term via the Self-Serve Portal only before this period. This allows you to have sufficient time for processing the contract term closure.

created_at

required, timestamp(UTC) in seconds

The date when the contract term was created.

subscription_id

required, string, max chars=50

The Id of the subscription that this contract term is for.

remaining_billing_cycles

optional, integer, min=0

The number of subscription billing cycles remaining after the current one for the contract term. This attribute is only returned for active contract terms.