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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
chargewith price set to the termination fee. - Do one of the following:
- Attach the charge-item to a plan, setting the
charge_on_eventparameter tocontract_termination. OR - Include the charge-item price on a subscription, setting the
subscription_items[charge_on_event][i]parameter tocontract_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 term [ JSON ]
{
"action_at_term_end": "renew",
"billing_cycle": 12,
"cancellation_cutoff_period": 0,
"contract_end": 1548974761,
"contract_start": 1517438761,
"created_at": 1517438761,
"id": "__test__3Nl7o66Rt41dR98T",
"remaining_billing_cycles": 11,
"status": "active",
"total_contract_value": 10740
}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
.
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.
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.