A more thorough explanation:

Definition: Renewal refers to the voluntary re-establishment of a legal relationship that was created by a previously agreed-to but expired contract. It is not just an extension of the previous contract, but rather the creation of a new contract that recreates the previous and now-renewed contract. Renewal provisions are often found in leases, promissory notes, or insurance policies. Parties may contract to have renewal provisions occur automatically after a period of time, or to require that one party gives notice of their intent to renew the contract.

For a renewal provision to be effective, it requires consideration. If the original contract contains the renewal provision, then the consideration provided for the original contract renders the renewal provision effective. If parties seek to subsequently renew the contract where no renewal provision existed in the original contract, they must provide new consideration. The consideration can take whatever form the parties accept.

Example: In the context of a lease renewal, a California Court of Appeals case, Simons v. Young, explained that “[s]o long as lessee paid consideration for the option to renew, and there is no question but that he did, the size, amount or nature of the consideration is irrelevant.” This means that as long as the lessee paid something to renew the lease, it doesn't matter how much or what it was.

Example: Renewal can also refer to the re-filing of a motion which the court initially denied or stayed. For example, Federal Rule of Civil Procedure Rule 50 allows parties to renew a motion for judgment as a matter of law 28 days after the trial. This means that if a party's motion for judgment as a matter of law was denied or stayed, they can renew the motion within 28 days after the trial.