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Terminating an evergreen contract

| Mar 22, 2021 | Uncategorized |

Before entering into any contract in the state of New York, you should always consider the terms for terminating said contract. This is especially true of evergreen contracts. If there is no clause about terminating your contract, you might be able to end it for the following reasons.

What is an evergreen contract?

First of all, the basis of an evergreen contract is that it is self-renewing at the end of the contract term. It is convenient in that both parties do not have to renegotiate terms at the end of the contract. Before the contract renews, there is generally a period of 30-60 days in which terms can be negotiated.

Terminating an evergreen contract by mutual agreement

By far, the easiest way to terminate a contract happens when both parties agree to it. In order to do this a new, both parties can write up and sign a termination contract. An experienced business law attorney can greatly assist in drawing up the new contract, which trumps the old, evergreen contract once signed.

Terminating an evergreen contract by default

You can terminate an evergreen contract when one or both parties is in default of the agreed-upon terms. For example, if you’ve contracted with a company to provide a particular service and they discontinue this service, the contract can be voided. Similarly, if you stop paying for a contracted service, your contract can be terminated.

Other options for terminating an evergreen contract

In the event that either party refuses to terminate the contract and no party is in default, one option is to negotiate a new contract with slightly different terms. If this is not a possibility, it may be wise to consult a business law attorney to go over your contract.

In some cases, there may be provisions within the contract that are simply not legal. Should this happen, the provisions of the contract cannot be enforced and the contract can be terminated. Many courts frown upon self-renewing, or evergreen, contracts, and this can work to your benefit in getting it terminated.