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90-minute live streaming program
  • June 29
  • 1:00 - 2:30 pm EST

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OnDemand Course

Understanding the Evergreen Clause: Benefits and Perils

June 29

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

Many consumer-to-business as well as business-to-business contracts, leases, policies, and service agreements contain what are commonly referred to as evergreen clauses, terms which essentially allow the contract to self-renew for a specified period of time or for an indefinite period of time. One of the parties, and in more cases than not, the consumer or purchaser, must take affirmative action to terminate the contract within, or not less than, a specified period of time. The advantages of such contracts, including pricing consistency, guarantee of goods and services, and regularity of customer and revenues, are often offset by the degree of control the seller has to effectively continue and enforce a contract the consumer or purchaser now no longer wants, or to impose new terms, especially increased prices, which the consumer or purchaser has had no ability to negotiate or to seek an alternative source.

While evergreen clauses have been generally enforced, there is a growing trend in a number of states to enact new laws which require certain protections to be put in place before an evergreen clause will be enforced, such as requiring the clause to be clear and conspicuous in the contract, to place it near the signature block, or furthermore to require separate express notice be given to the consumer or purchaser that the clause will be invoked shortly. Some new laws are so draconian in nature that the seller can be liable to forfeit all revenues earned under the contract if these protective measures are not adopted. This topic will explore the nature of evergreen clauses, their enforceability then and now, newer state statutes creating restrictions, and the benefits and perils of their continued use.

Learning Objectives

  • You will be able to review the different types of contracts and agreements.
  • You will be able to recognize the benefits for the purchaser and for the seller.
  • You will be able to identify pitfalls and perils.
  • You will be able to discuss consumer protection and other statutes.

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Why Lorman?

Over 34 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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More Program Information

Why Lorman?

Over 34 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

This course was last revised on June 26, 2018.

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

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

Live Webinar Registration

  • AL CLE 1.5
     
  • This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.5 hours credit.
     
  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • Arizona CLE 1.5
     
  • The State Bar of Arizona does not approve or accredit CLE activities for the Mandatory Continuing Legal Education requirement. This activity may qualify for up to 1.5 hours toward your annual CLE requirement for the State Bar of Arizona.
     
  • 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.
     
  • CT CLE 1.5
     
  • Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
     
  • HI CLE 1.5
     
  • This program was approved by the Hawaii State Board of Continuing Legal Education for 1.5 CLE credit hours.
     
  • IL CLE 1.5
     
  • This course was approved for a total of 1.5 hours of MCLE Credit by the Illinois MCLE Board.
     
  • ME CLE 1.5
     
  • This course has been approved by the State of Maine Board of Overseers of the Bar. Lawyers who complete this course shall receive 1.5 hours of CLE credit under M. Bar R. 12.
     
  • NH MCLE 1.5
     
  • NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 90 Minutes.
     
  • NJ CLE 1.8
     
  • This program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 1.8 hours of total CLE credit.
     
  • NV CLE 1.5
     
  • This program has been approved by the Nevada Board of Continuing Legal Education for 1.5 CLE hours.
     
  • PA CLE 1.5
     
  • This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.5 hours of substantive law, practice and procedure CLE credit.
     
  • RI CLE 1.5
     
  • This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.5 hours of CLE credit.
     
  • VT CLE 1.5
     
  • This program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hours of CLE credit.
     
  • WA CLE 1.5
     
  • This program has been approved by the Washington State Board of Continuing Legal Education for 1.5 hours of Law & Legal Procedure credit.
     
  • WI CLE 1.5
     
  • This program has been approved by the Board of Bar Examiners for 1.5 hours for use toward the Wisconsin Mandatory CLE requirement.
     
  • WV MCLE 1.8
     
  • This program has been approved by the West Virginia State Bar MCLE Commission for 1.8 MCLE hours.
     
  • ISM 1.5
     
  • Participants who successfully complete this program will receive 1.5 hours of continuing education. They may be applied toward ISM CPSM, CPSD or C.P.M. recertification. ISM's consent to approve hours for this educational event is not an endorsement of this program or its content by ISM.
     
  • CPE 1.8 including Business Law 1.8
     
  • Lorman Education Services is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: https://www.nasbaregistry.org/cpas/complaints. For more information regarding administrative policies such as complaint and refund, please contact our offices at 866-352-9539. CPE Credit: Maximum Credit Hours: 1.8 each session (based on a 50 minute credit hour). You must attend at least 50 minutes to obtain credit. Field of Study: Business Law for 1.8 hours. Prerequisite: . Level of Knowledge: Intermediate. Teaching Method: Seminar/Lecture. Advance Preparation: None. Delivery Method: Group Internet Based. Please refer to the information in this brochure for outline, course content and objectives. Upon completion of this course, you will receive a certificate of attendance. Final approval of a course for CPE credit belongs with each state's regulatory board. Please note: In order to receive CPE credit for this course you MUST use the streaming audio option, as well as enable and complete the required progress checks.
     
  • Lorman Business Center, LLC. is a registered provider for CPA CPE through the State Education Department of New York, Sponsor number: 000640. The following course will carry the subject area of Advisory Services for 1.5 hours.
     

Who should attend?

This live webinar is designed for purchasing managers, material managers, presidents, vice presidents, business owners and managers, CFOs, controllers, accountants, contract administrators, buyers, and attorneys.

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Why Lorman?

Over 34 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 34 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.

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Product ID: 407483
Published 2018, 2021
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