Beware of the Evergreen Clause

Unfortunately, some businesses only recognize the need for contract management software once a problem arises – when it’s too late to enact “an ounce of prevention.”

Here’s a perfect example: Consider the “evergreen clause,” or the autorenewal.

Investopedia defines the evergreen clause as: “A contract provision that automatically renews the length of the agreement after a predetermined period, unless notice for termination is given. Evergreens are often used for long term agreements such as memberships or maintenance contracts.”

How does this sneak up on the unsuspecting contract administrator? In an article on the website Mondaq, author Steve Dutton poses the situation of a business owner deciding to cancel the license agreement for a certain computer software which was purchased to improve productivity, but ended up not being effectively used.

Upon calling the vendor, the representative notifies the business owner that the license agreement does not allow a simple cancellation. Instead, the business owner is contractually obligated to continue paying for the software for another full year. The real culprits here are the terms and conditions of the software license containing the automatic renewal or evergreen clause.

Automatic renewals often come with a definition of when notice must be given to cancel a contract. The problem isn’t that evergreen clauses are inherently bad. It’s that notification dates for cancellation have a habit of being institutionally “forgotten” – unless there’s a serious problem.

Contract management software helps you shed light on these forgotten contracts in two key ways. First, you can customize notes and fields to record specific deliverables of vendor/service providers, thus giving you a history of performance. Second, you can set up automatic reminders for key renewal dates. This feature is in all Contract Assistant versions, and in the Enterprise edition you can even configure alerts to be distributed via email.

Setting an alert or reminder 60 to 90 days out from a renewal notice cut-off notice date should give you enough time to review performance and get input before contacting the vendor/service provider. At the very least, it may give your business the leverage it needs to alter a contract to meet your company’s needs better.

For additional discussion and recommendations about evergreen clauses, read this blog post by Law 4 Small Business.

It may not always be possible to avoid evergreen clauses, but you can certainly get ahead of any potential problems if you’re using good contract management software.

Wrapping up 2011 and an end-of-year, limited time offer

In this post, we’re excited to let you know about a few announcements for the month of December, and a little something for everyone to start the New Year right.

If you’re looking for more info about contract management software… 

Download our free executive report titled “Contract Management Software – Reduce Risk While Saving Time & Money.” This ten-page white paper outlines how contract management software can help mitigate the risks and offers suggestions on how to evaluate and choose a contract management system.

If you’re ready to try using contract management software…

Please download the free 30-day trial copy of Contract Assistant Standard Edition. This single-user license software trial is fully functional, so you can easily begin to build your database of each contract’s details, involved parties, deadlines, and more. For a full list of features, visit our product page.

If you’re looking for more than just a single-user system, trial copies are also available for Contract Assistant PRO and Contract Assistant Enterprise Edition. For more info on these two versions – or for a live web demonstration, please contact a sales associate at 877-509-7500 or They can help you to safely and quickly install these editions.

If you’re already using Contract Assistant…

We have several limited-time offers that expire at the end of the month. Whether you have been contemplating an upgrade to PRO or to Enterprise, or adding users to whichever edition you currently use, now is the time to act.

To close out the end of the year, our sales associates have a variety of special offer options to extend to our current customers. To save on adding users or upgrading to new functionality and features, contact a sales associate at 877-509-7500 or Don’t delay – these offers are only valid until December 31, 2011

If you’re looking to connect with Contract Assistant…

We hope you’ll subscribe to receive updates to this blog! And if you’re looking for other places to connect with us around the web, you can find us on:

We also jumped right on board when Google+ opened up their social networking platform for business pages a few weeks ago. Visit our Google+ business page and add us to your circles. On behalf of everyone working on Contract Assistant at Blueridge Software, we wish you a happy and healthy holiday season and a prosperous New Year!