Customer-vendor partnerships are the foundation of any business. One cannot support the other sans a level of trust and confidence, which more often than not is documented in a service agreement or contract.
Typically, the duration of "agreement" is several years, and the language consists of any number of stipulations, clauses, legalese, and benchmarks outlining the services to be performed and/or products to be sold, as well as the associated pricing.
More often than not, a brief review by the customer of a vendor agreement is focused on the pricing; the remainder of the terms and conditions glossed over as nothing more than "boiler plate" jargon.
Such negligent business practices can result in serious repercussions beyond just buyer's remorse. A business owner can be left at the mercy of a greedy, sub-standard vendor for years to come with little recourse. This trap can be avoided by ensuring the contract/agreement does not contain the one sentence that is employed by nearly every service industry in the country.
The sneaky, parasitic clause has several aliases, the most common of which are "evergreen," "automatic renewal" and "roll-over."
Regardless of the name, the clause stipulates that unless the customer notifies the vendor of its intent to terminate the agreement at least 60 days prior to expiration in writing, usually via certified USPS mail inclusive of return receipt, the agreement will renew itself for like term (that is, the same length of time as this original agreement). I can hear the collective "ouch" from my readers as you've completed reading this paragraph to this point!
Indeed, failure to strike this language from any contract can lead to a painful experience for years to come. I've been on both ends of the evergreen as both a customer and a vendor, and I have always found it to be corrosive in forging a business relationship. Think about it. If, as a vendor, I promise to be a trusted partner to my client and ensure in writing that the level of service/product expectation will be met as we have mutually negotiated in good faith, I would expect to be pro-actively approaching my client months in advance of contract expiration to begin renewal discussions.
Thus, why would I need an evergreen clause? It gives the appearance of entrapment, and in fact it is just that! In terms of enforcement, the clause is almost always upheld in a court of law, at least on the initial roll-over period. Short of negotiating an expensive buy-out of the contract, or documenting instances of the vendor performance failure (which can be time consuming and determined objective in a court of law), the customer remains married to an unwanted vendor.
Take the time to carefully read any vendor contract that requires your signature. Look specifically for the evergreen clause and strike it from the contract. It's as simple as drawing a line through it and having both parties initial the stricken language; it's almost never a deal-breaker.
Both parties can agree that upon expiration, the initial terms and conditions will remain in place on a month-to-month basis until when/if a new contract is executed. You need not have an attorney's eye in order to be self-protected from this common contract entanglement.
Reach Sonck at [email protected]
Typically, the duration of "agreement" is several years, and the language consists of any number of stipulations, clauses, legalese, and benchmarks outlining the services to be performed and/or products to be sold, as well as the associated pricing.
More often than not, a brief review by the customer of a vendor agreement is focused on the pricing; the remainder of the terms and conditions glossed over as nothing more than "boiler plate" jargon.
Such negligent business practices can result in serious repercussions beyond just buyer's remorse. A business owner can be left at the mercy of a greedy, sub-standard vendor for years to come with little recourse. This trap can be avoided by ensuring the contract/agreement does not contain the one sentence that is employed by nearly every service industry in the country.
The sneaky, parasitic clause has several aliases, the most common of which are "evergreen," "automatic renewal" and "roll-over."
Regardless of the name, the clause stipulates that unless the customer notifies the vendor of its intent to terminate the agreement at least 60 days prior to expiration in writing, usually via certified USPS mail inclusive of return receipt, the agreement will renew itself for like term (that is, the same length of time as this original agreement). I can hear the collective "ouch" from my readers as you've completed reading this paragraph to this point!
Indeed, failure to strike this language from any contract can lead to a painful experience for years to come. I've been on both ends of the evergreen as both a customer and a vendor, and I have always found it to be corrosive in forging a business relationship. Think about it. If, as a vendor, I promise to be a trusted partner to my client and ensure in writing that the level of service/product expectation will be met as we have mutually negotiated in good faith, I would expect to be pro-actively approaching my client months in advance of contract expiration to begin renewal discussions.
Thus, why would I need an evergreen clause? It gives the appearance of entrapment, and in fact it is just that! In terms of enforcement, the clause is almost always upheld in a court of law, at least on the initial roll-over period. Short of negotiating an expensive buy-out of the contract, or documenting instances of the vendor performance failure (which can be time consuming and determined objective in a court of law), the customer remains married to an unwanted vendor.
Take the time to carefully read any vendor contract that requires your signature. Look specifically for the evergreen clause and strike it from the contract. It's as simple as drawing a line through it and having both parties initial the stricken language; it's almost never a deal-breaker.
Both parties can agree that upon expiration, the initial terms and conditions will remain in place on a month-to-month basis until when/if a new contract is executed. You need not have an attorney's eye in order to be self-protected from this common contract entanglement.
Reach Sonck at [email protected]