By Funmilayo Olagunju

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Black’s Law Dictionary defines evergreen contract as a contract that renews itself from one term to the next in the absence of contrary notice by one of the parties.

Evergreen contracts are often used in business relationships that are ongoing such as rental leases, service agreements and reoccurring purchasing/subscription.  Evergreen contracts provide continuity and stability to the relationship between the parties. It eliminates the need for repeated agreements over same subject matter.

In the absence of a notice of termination from either party, an evergreen contract automatically renew itself after a period of time, like a year.

An evergreen contract is different from a perpetual contract which does not have an expirary date.

An evergreen contract is also different from from a renewable contract where both parties must renew the contract after the expiration of the initial term.

Renegotiation should be factored into the agreement.

Evergreen contract may be terminated by issuance of adequate notice as agreed.

“Can two people walk together without agreeing on the direction?”

Amos 3:3 (NLT)