Evergreen

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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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RELATED FAQS
  1. What is an evergreen provision and how does it affect shareholders?

    It is common for publicly-traded corporations to provide more than just regular salary compensation to their management and ... Read Full Answer >>
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    Sometimes waiver of subrogation clauses are ineffective at preventing a third-party lawsuits. In determining who is responsible ... Read Full Answer >>
  3. What is an alienation clause?

    Whether used in reference to insurance policies, mortgages or commercial loans, an alienation clause stipulates that should ... Read Full Answer >>

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