LeaseQ Advises Consumers to Beware of Evergreen Clauses in Leasing Agreements

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Automatic renewals are a nasty part of any business contract, designed to keep consumers on the hook for extended periods. An equipment lease provider offers warnings to avoid being taken.

(An evergreen clause) is basically a contract that renews itself from one term to the next in the absence of any contrary notice by either party involved in the lease.

LeaseQ, one of the leading providers of equipment financing and leasing in the country, is advising consumers to watch out for hidden clauses in their leasing contracts that could automatically renew the contract for another term without the express consent of the customer.

Known as an “evergreen clause,” it is basically a contract that renews itself from one term to the next in the absence of any contrary notice by either party involved in the lease. Often glossed over during contract negotiation, many clients find themselves tied to a contract agreement far longer than they had anticipated. In many cases, the only way to avoid this clause from invoking is to make sure that proper notice is not only given, but given within a specified period of time.

The wording of a typical evergreen clause may read as follows:

The Commencement Date will be May 1, 2009. The Term of this contract will be for five (5) years beginning on the Commencement Date. The contract wil be automatically renewed at each fifth anniversary for an additional five (5) year term unless terminated by either party by giving written notice to the other party at least ninety (90) days, but no more than 120 days, prior to the end of the then-current five (5) year term.

If the customer misses that specified window of opportunity, the contract renews and is legally binding. It is for reasons such as this that any and all legal documents should be read and understood thoroughly before signing, paying particular attention to anything that resembles an evergreen clause. If found, negotiations should be held on removing that clause from the contract.

If the other party refuses to remove the evergreen clause, there are two options. A) Simply calendar out time to make sure the proper notification is made of intent to renew or not within the specified time frame spelled out in the evergreen clause, or B) look for another company that does not make a practice of using evergreen clauses in their agreements.

LeaseQ is a new and innovative source for instant leasing quotes from leading edge audio visual equipment financing and leasing companies, and it is the fastest and most convenient way to lease the equipment a company needs from the company of their choosing. Visit them online at for more information.

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