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Evergreen Clause
A provision that automatically renews the terms of a contract or agreement unless one of the parties opts out, sometimes relevant in long-term M&A deals.
Implications
A contract provision that automatically renews the agreement for a specified period unless one party gives notice of termination, often used in subscription services, leases, and employment contracts.
Example
Example: A SaaS provider includes an evergreen clause in its service contracts, automatically renewing the subscription annually unless the client opts out 30 days before the renewal date.
Related Terms
Different from standard contracts, which expire after a set term, evergreen clauses ensure continuity unless proactively canceled, reducing administrative burden and securing ongoing revenue.
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