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OnDemand Course

Understanding the Evergreen Clause: Benefits and Perils

Gain an understanding of important drafting considerations when including evergreen clauses in your contracts.

An important provision in contracts that contemplate ongoing performance by one or both parties is the contract term. In many cases the term provision is given short shrift or even ignored altogether, leaving the parties unclear how long performance is to continue and when, if ever, the contract may be terminated. In other cases, without much consideration, parties agree to auto-renewal or evergreen clauses that automatically extend the contract term absent some action by one of the parties to prevent the renewal. This material considers the fundamentals of drafting evergreen clauses in contracts. You will obtain an understanding of the legal principles applicable to the term of a contract, including contracts with definite terms, indefinite terms, and contracts with evergreen clauses. You will also receive an overview of important drafting considerations when including evergreen clauses and how to ensure that your contract is clear and enforceable. Certain state law considerations, relating to the application of such clauses in the context of business, consumer and other types of contracting are addressed.

89 minutes
Course Exam
Certificate of Completion
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Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Automatic Renewal or Rollover and Evergreen Clauses

  • Similarities - Affirmative Action to Terminate
  • Differences - Defined New Term vs. Continuous Renewal
  • Examples of Clause Language
  • Not Perpetual - Can Be Terminated

Types of Contracts and Agreements

  • Leases of Real Property
  • Leases of Personal Property
  • Service Agreements
  • Insurance Policies

Benefits for the Purchaser

  • Guarantee of Supply and Service
  • Pricing Consistency - Maybe

Benefits for the Seller

  • Regular Customer
  • Continuing Revenue Stream
  • Avoidance of Competition
  • Reduction of Marketing Expense

Pitfalls and Perils

  • Termination Within a Specified Period of Time
  • Termination Outside a Specified Period of Time

Escape Hatches

  • Termination by Mutual Agreement
  • Termination by Reasonable Notice Outside the Clause
  • Renegotiation

Enforceability

  • A Look at Past Law
  • Current Legal Trends

Consumer Protection and Other Statutes

  • Clear and Conspicuous Language
  • Advance Notice
  • Forfeiture
  • Reasonable - a Look at Some State Statutes
  • Draconian - a Look at Some Other State Statutes
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Why Lorman?

Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

Applications have not yet been submitted for Delaware, Idaho, Kentucky, Maine, New Hampshire, Ohio, Oklahoma, South Carolina, and Wyoming CLE for this course. However, if you are interested in obtaining CLE for any of the listed states or have any additional credit questions please email us at [email protected] or call us at 866-352-9540.

This course was last revised on June 29, 2021.

Call 1-866-352-9540 for further credit information.

  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     

To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Richard Moorhouse

Richard Moorhouse

Greenberg Traurig, LLP

  • Shareholder with Greenberg Traurig, LLP
  • More than 30 years of experience litigating procurement award and contract disputes at the federal, state, and local level
  • Practice also frequently involves the conduct of internal investigations, the preparation of comprehensive submissions to clients detailing the results of those investigations, and disclosures to the government in a variety of matters including those giving rise to potential debarments, suspensions, and other determinations of ineligibility to receive contract awards
  • Retained as an expert witness in complex civil litigation involving federal government contract issues
  • Achieved the highest rating with Martindale-Hubbell® Law Directory
  • J.D. and M.A. degrees, Suffolk University Law School; B.A. degree, University of Massachusetts at Amherst
  • Can be contacted at 703-749-1304 or [email protected]
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Why Lorman?

Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

All of your training, right here at Lorman

All of your training, right here at Lorman.

Pay once and get a full year of unlimited training in any format, any time!

  • OnDemand Courses
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  • State Specific Credit Tracker
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Questions? Call 877-296-2169 to speak with a real person.

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Product ID: 407483
Published 2021
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