What characterizes an evergreen contract?

An evergreen contract is characterized by its lack of a set expiration date. This type of agreement automatically renews itself for successive terms unless one party provides notice of termination. The inherent flexibility of evergreen contracts makes them suitable for ongoing relationships where continuity is essential, such as service agreements or subscription-based models. These contracts ensure that the parties involved maintain their obligations without the need for renegotiation each time a term ends.

In contrast, contracts with a set expiration date are defined by a specific duration and do not renew automatically. Fixed terms limit the agreement to predetermined conditions that do not adapt over time. Additionally, contracts that are subject to an annual review may imply periodic reconsideration of the terms, but they still have a definitive renewal or expiration point, which is distinct from the nature of an evergreen contract.