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I like them. Without them, so many times parties will forget/won’t realize a term has run. They’ll keep operating under that agreement as if it’s in full effect. Then you end up in a situation where the parties are arguing over what their conduct actually means. Plus, and more applicable to my practice, is that we have to note in diligence that we don’t know if an agreement is still in effect. A buyer might require a new agreement or an amendment (and I don’t blame them, if it’s a material agreement). With an evergreen provision, you avoid this issue entirely. Although the parties can get locked into things much easier if they’re not careful.
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If you're a vendor, ya love em. If you're a buyer, ya hate em.
We operate in the healthcare industry and have med students and residents rotating to our facilities. Every rotation has a set of requirements depending on so many factors that the master agreements don’t usually cover. I’m more in for having a fixed term bc the rotations are based on the institution’s academic requirements, semester, etc. So, it’s easy to tract when they expire. The problem that we encounter is when we have new rotations with institutions that we already have master agreements with. Bc of the nature of these rotations, they always want to take the easier route, less time and quick turnaround time. The way to do that is to add addenda, which sometimes takes the same amount of time. We ran into situations where they misread the evergreen clause and it took weeks to realize that.
You can draft it is “Not more than 60 but at least 30 days of the end of the Term either party May send the other a Notice of Renewal stating that party’s intent to renew the Agreement under the same terms for a period of xyz. The other party shall be under no obligation to accept the renewal, but if it does not either accept or reject the renewal with it 14 days of receiving the Notice of a Renewal then the renewal shall be deemed accepted”
“The Agreement shall not be renewed except by the procedures described in clause X above or by written agreement between the parties”
Depending on the contract, if there are order forms / SOWs, you can have the MSA have an evergreen but give the parties the right to terminate if there are no active OF or SOWs for more than X months (there may be reasons where the parties want the MSA to be an evergreen) e.g. work is done project by project