Evergreen Clause

A clause that is automatically extended without amendment, year over year, unless one of the parties provides notice in writing that it is not to be renewed. Also known as an "automatic renewal" clause, they are typically found in letters of credit and other revolving loan contracts, as well as service-based agreements.

Typically, an Evergreen Clause takes the following form in a contract:

"Each Term shall automatically renew for subsequent period of the same length as the initial Term unless either party gives the other written notice of termination at least (30) days prior to expiration of the current term."