Join Richard Moorhouse, Shareholder at Greenberg Traurig as he presents on "Understanding the Evergreen Clause: Benefits and Perils" on June 29th, at 1:00PM. Many consumer-to-business as well as business-to-business contracts, leases, policies, and service agreements contain what are commonly referred to as evergreen clauses, terms which essentially allow the contract to self-renew for a specified period of time or for an indefinite period of time. One of the parties, and in more cases than not, the consumer or purchaser, must take affirmative action to terminate the contract within, or not less than, a specified period of time. The advantages of such contracts, including pricing consistency, guarantee of goods and services, and regularity of customer and revenues, are often offset by the degree of control the seller has to effectively continue and enforce a contract the consumer or purchaser now no longer wants, or to impose new terms, especially increased prices, which the consumer or purchaser has had no ability to negotiate or to seek an alternative source. While evergreen clauses have been generally enforced, there is a growing trend in a number of states to enact new laws which require certain protections to be put in place before an evergreen clause will be enforced, such as requiring the clause to be clear and conspicuous in the contract, to place it near the signature block, or furthermore to require separate express notice be given to the consumer or purchaser that the clause will be invoked shortly.
You May Also Be Interested In: