Evergreen

DEFINITION of 'Evergreen'

A contract provision that automatically renews the length of the agreement after a predetermined period, unless notice for termination is given. Evergreens are often used for long term agreements such as memberships or maintenance contracts.

BREAKING DOWN 'Evergreen'

An evergreen is renewed after a short period, which is agreed upon by the parties at the outset of the contract. Let's use a year-long evergreen contract with a monthly renewal as an example. This contract will last one year from the beginning month. After the first month, if no termination notice is given, then contract will extend to last a year from that period and so on. Once termination is given, the contract would live out the rest the year and not be renewed again.

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