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.

Thecontract term resource described below defines the properties of this lock-in period. This includes thenumber of billing cycles, thetotal contract value, theaction to be taken at the end of the contract term, and so on. To allow for exceptions, you also have the option of terminating anactive contract term and charging atermination fee.

A contract term starts in theactive state and ends in thecompleted state. If the contract was canceled due to non-payment or other reasons, it can end in thecanceled orterminated state. A given contract term is always associated with one, and only one subscription. A subscription, however, can be associated with only oneactive contract term. Over time, a subscription can be associated with several non-active contract terms. Theactive contract term for a subscription is available as anobject within the subscription.

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

1. ClickSettings on the left navigation.
2. ClickConfigure Chargebee.
3. UnderBilling, clickContract Terms.
4. 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 andset 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:

1. Create an item price for an item oftypecharge withprice set to the termination fee.
2. Do one of the following:

• Attach the charge-item to a plan, setting thecharge_on_event parameter tocontract_termination. OR
• Include the charge-item price on a subscription, setting thesubscription_items[charge_on_event][i] parameter tocontract_termination.

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