Twice in a week I’ve been presented contracts that contained Evergreen clauses in them. In one case the contract renewed for one year terms and in the other it renewed for additional 3 year terms. That’s crazy!
Years ago we got into a legal battle with a provider over these clauses, and ever since we have had a company policy that prohibits us from signing any contracts that contain Evergreen clauses. I understand that a business has up front costs when a new customer comes on board, so I’m OK with an initial term, but those costs diminish over time. Being locked into long term contracts can also lock you into being saddled with poor service or a company that is not changing with the times.
We typically negotiate for automatic monthly renewals after the initial term has expired. This holds companies accountable and allows flexibility in a fast changing and competitive environment.
I know of one website provider in the industry who is holding a large number of dealers hostage, and not only with their websites, but their domain names and poorly performing marketing contracts. As I’ve said before, own your brand!
What lessons have you learned the hard way?
#dealers #contracts #evergreen #RV #marine #powersports #negotiate