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Evergreen Contract Template

An evergreen contract is a type of contractual agreement that includes automatic renewal clauses, allowing the contract to extend beyond its initial term without requiring the explicit consent of the parties involved. The term "evergreen" is derived from the perpetual renewal nature of these contracts, akin to the evergreen trees that retain their leaves year-round.


Key features of an evergreen contract typically include:

  • Automatic Renewal: Evergreen contracts contain provisions that automatically renew the agreement for a specified period unless one of the parties provides notice of termination within a predetermined timeframe before the current term expires.

  • Notice Period: The contract outlines the notice period required for termination. This period is the duration within which either party must notify the other party if they choose not to renew the contract. This notice period can vary and is a crucial aspect of evergreen agreements.

  • Renewal Terms: Evergreen contracts often define the length of each renewal term. For example, a one-year renewal term means the contract will automatically renew for an additional year unless terminated as per the notice provisions.

  • Continuity and Stability: The primary purpose of evergreen contracts is to provide continuity and stability in ongoing business relationships. These contracts are commonly used in service agreements, subscription-based services, and other arrangements where a prolonged association is desirable.

  • Efficiency and Convenience: By automating the renewal process, evergreen contracts reduce the administrative burden of renegotiating and drafting new agreements. This can be particularly advantageous in long-term relationships where the terms remain relatively constant.

  • Flexibility: While evergreen contracts offer automatic renewal, they also typically include provisions that allow for termination without cause under specific conditions. This provides flexibility for the parties involved to reassess the relationship periodically.

Evergreen contracts are prevalent in various industries, including software licensing, service agreements, rental leases, and ongoing business partnerships. These contracts help streamline relationships, foster long-term commitments, and reduce the need for frequent renegotiations.

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