Evergreen Clause

What is an evergreen clause?

An evergreen clause keeps a contract alive until someone ends it. There is no final expiry date. The contract rolls forward month after month or year after year, and it only stops when you or the vendor give notice.

The name comes from evergreen trees, which never lose their leaves. The idea is the same: the contract never runs out on its own.

In everyday use, "evergreen" and "auto-renewal" overlap a lot. Lawyers and trade groups often use "evergreen provision" for any clause that renews a contract unless someone objects. The Equipment Leasing and Finance Association's summary of New York law, for example, files the state's automatic renewal rules under "evergreen provisions." So when someone says "evergreen," check which of the two shapes below they mean.

Evergreen vs auto-renewal

The difference is in how the contract is built:

• Auto-renewal. The contract has a fixed term, such as 12 months. An auto-renewal clause starts a new fixed term at the end of each one. Each renewal is a fresh commitment, often with a fresh price.
• Evergreen. The contract has no end date at all. It continues until terminated, sometimes on a rolling basis such as month to month, with a notice period to stop it.

In SaaS, you often get both at once. A master agreement runs open-ended, while the subscriptions under it auto-renew in fixed terms. HubSpot's terms say you remain "subject to this Agreement for as long as you have access" to an account, while each paid subscription renews for the shorter of your prior term or one year. Atlassian's Customer Agreement takes a slightly different path: it "expires when all Subscription Terms have ended," but because those terms auto-renew, the agreement keeps going as long as any subscription does.

What it looks like in a vendor's terms

A typical clause reads like this:

This Agreement begins on the Effective Date and continues until terminated by either party. Each subscription continues on a month-to-month basis until cancelled. Either party may terminate this Agreement or any subscription by giving the other party at least 30 days' written notice, effective at the end of the then-current billing period.

• "Continues until terminated" means there is no end date. The contract does not lapse if you forget about it.
• "Month-to-month basis" means each month is a new period. You are not locked into a year, but you keep paying until you cancel.
• "At least 30 days' written notice" is how you get out. Count it from the date the vendor receives your notice.
• "Effective at the end of the then-current billing period" means you still pay for the period you are in, and possibly the next one if your notice comes late.

Why it matters to you

• Forgotten tools keep billing. An evergreen contract never asks you to decide again. A tool nobody uses can charge your card for years. This is a common source of SaaS sprawl.
• The terms can move under you. An open-ended agreement is often paired with a right for the vendor to update its online terms. Over years, the contract you are under can look very different from the one you accepted.
• Prices can change at any period. On a rolling monthly plan, the vendor may be able to change the price for a future month with notice, depending on its terms. See price change notice.
• Your data stays put. While the contract runs, the vendor keeps processing your data under its current privacy policy and DPA, including any new subprocessors it adds.
• Some laws treat them differently. A few states regulate automatic renewals in business contracts. New York's General Obligations Law 5-903 does not apply when the renewal period is one month or less, so a month-to-month evergreen plan may fall outside it. Do not count on state law here, as most auto-renewal laws protect consumers rather than businesses.

What to check

• Whether the contract has an end date at all, or "continues until terminated."
• How long the notice period is and how notice must be sent. Save proof that you sent it.
• Whether ending the master agreement also ends every subscription under it, or whether each one needs its own notice.
• Whether the vendor can update its terms or prices during the rolling period, and how much notice it gives.
• Whether you still owe fees for the period in progress, or for a minimum number of periods.
• Whether the tool is in your vendor inventory with an owner who reviews it at least once a year.

How to manage evergreen contracts

Because an evergreen contract never forces a decision, you have to create one. A simple routine works:

1. List every vendor whose contract has no end date or rolls month to month.
2. Give each one an owner and a review date, at least once a year.
3. At each review, check usage, cost and whether the terms have changed since the last review.
4. If you are leaving, send notice the way the contract requires and keep the confirmation.
5. After cancelling, export your data and confirm deletion under the vendor offboarding steps.

How Venpo helps

Venpo watches the public terms, privacy policies, DPAs and billing pages of your vendors and emails you when they change. For evergreen contracts, which can run for years without a new signature, the change history shows how the terms you are bound by have shifted since you signed.