Q: Are "evergreen" or automatic renewal clauses in contracts legal in Tennessee?
We are a marketing firm that has to have our clients re-sign a contract every year.
We'd like to implement an "evergreen" clause so that they continue their service unless they express to leave with a 90 day notice.
Is this legally binding in the state of Tennessee where we operate?
A: This is the type of question that you should consult with a business attorney to discuss. An experienced attorney would be able to answer this question and likely improve the draft of your current contract in other ways to make it more favorable to you then whatever you are currently using. Good luck.
Anthony M. Avery agrees with this answer
A: I am not aware of a prohibition on clauses that auto renew in contracts. But haven't researched the issue either. I believe there is at least one state that does restrict(and there may be others) so you would need to be careful whether you are contracting with someone in a state that may prohibit. I would suggest if you do have the language that you send out a reminder ahead of time to remind the client that the contract will auto renew.
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