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This Agreement Is Automatically Renewed

Each term is automatically extended for subsequent periods of the same length as the original term, unless one of the parties gives the other party written notice of termination at least thirty (30) days before the expiration of the current term. Finally, when buying an existing business, a buyer must carefully check or have their lawyers check all existing contracts as part of the due diligence process. Such a revision avoids the adoption of long-term contracts that automatically renew. I have encountered several types of contracts that contain automatic renewal provisions. In one case, the contract was automatically renewed for an additional ten (10) years (yes, you read that right) and the customer missed the deadline to give a non-renewal notification. The client had acquired a leased property on behalf of a service contract that was in the middle of the term of the contract. The client had first noticed that the contract had an automatic renewal provision until it was too late. Fortunately, some carefully planned negotiations have resolved the issue. But the goal is to never find yourself in such a difficult situation. There are many cases that are decided by courts across the country, which deal with the applicability of Evergreen clauses relating to different business transactions. In most cases, especially in the context of commercial-to-business contracts, the courts remove these provisions narrowly when the language of the contract is clear and clear.

If the language of the contract is not respected and is not terminated within the required notice period, the contract is automatically renewed for an additional period. . . .