Glossary
Evergreen clause
Short answer
An evergreen clause makes a contract continue indefinitely, with no fixed end date, until one party terminates it by giving notice. It differs from a standard auto-renewal, which extends for defined periods. Evergreen contracts need an explicit exit route and notice period, or the customer may stay bound far longer than intended.
By Pactinel editorial teamReviewed on October 22, 2026
An evergreen contract has no expiry date. Instead of ending, it keeps running until a party ends it. The term "evergreen" is also used loosely for any contract that renews again and again, so read the actual wording rather than the label.
Evergreen versus auto-renewal
| Auto-renewal | Evergreen | |
|---|---|---|
| End date | Yes, at the end of each term | None |
| Default outcome | Another fixed term | Continues until terminated |
| Exit | Non-renewal notice before the term ends | Termination notice at any time, usually after a minimum notice period |
The practical difference is the exit. With auto-renewal there is a deadline each cycle and a cost of missing it. In an evergreen contract you can usually leave at any time, but only after the notice period, and there is often a minimum commitment.
Example clause
"This Agreement continues until terminated by either party on 90 days' written notice."
Here, giving notice today ends the contract in 90 days. Nothing is lost by waiting except the fees that keep accruing, so evergreen contracts are easy to forget. A calendar reminder for an annual review is a sensible control.
Check before signing
- Is there a minimum initial period before notice can be given?
- Can the supplier terminate on the same notice, and raise prices meanwhile?
- Which termination for convenience rights apply?
This is general information, not legal advice.