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Learn about avoiding misleading by evergreen clauses

As a business owner, you do not want to renew any lease items or property contract to be renewed automatically when it was supposed to expire. This evergreen clauses defined as business term is sometimes becoming a bigger issue at a later time, especially when you are trying to sell your business to other party for any reason.

Typically evergreen clause situation is like this : Each Term in the contract will automatically renew for subsequent periods of the same length as the initial Term unless either party already had given the other side the written and signed notice of termination at least thirty (30) days prior to expiration of the then-current Term. The problem arises when the other party didn’t give out the written notice at least 30 days prior to the expiration, the contract will be renewed automatically regardless of the party’s will or decision. This kind of auto renewal can be seen in many fields of business area, such as retail, service or even in leagl field.

As in this report, there are many states that are awaken to notice the hole of this situation, and trying to render the related law to eliminate any unclear conditions so that there are no disadvantage on either party involved.

Anyone who would like to be more informed of this evergreen clause in their contract, they should go to their state’s legislation center and find out more details about defensive methods that are not affected due to this automatic renewal claim without knowing.


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