We typically use auto-renewing contracts for a long term supply agreements. However, we are looking at using evergreen contracts for a few contracts. I'd like to understand the differences between evergreen contracts and auto renewal contracts.
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At the most basic level, evergreen contracts continue until terminated. Auto-renewal contracts provide a procedure for terminating the contract on a date certain.To illustrate: an evergreen contract might say, "either party can terminate this contract at any time upon 30 days written notice." That is quite different from an auto-renewal agreement that says: "This contract shall automatically renew for 3 years on December 31, 2016, unless either party provide written notice of termination by October 31, 2015." The auto-renewal example actually has two termination options. First, it can terminate on December 31, 2016, if one provide notice, OR it can terminate on December 31, 2019, if it auto-renews for three years. In neither case is the auto-renewing contract evergreen.