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Evergreen contracts, also known as automatic renewal contracts or rollover contracts, are agreements where the contract is automatically renewed at the end of the term unless either party gives notice to terminate. These types of contracts are common in many industries, including subscriptions, insurance policies, and service agreements. However, many people are wary of evergreen contracts and wonder if they are legal in California.

The short answer is yes, evergreen contracts are legal in California. However, there are some specific requirements that businesses must follow in order to use them.

One of the main requirements is that the contract must clearly disclose the automatic renewal clause and the process for cancellation. California law requires that contracts include a separate section that explains the terms and conditions of the automatic renewal clause in a clear and conspicuous manner. Additionally, the cancellation process must be easy and straightforward for consumers.

Furthermore, the California Business and Professions Code requires that businesses provide written notice of the auto-renewal at least 30 days before the renewal date. This notice must include the new price and any changes to the contract terms, as well as information on how to cancel the contract.

It is also important to note that certain industries, such as health clubs and dating services, have additional requirements for evergreen contracts. For example, health clubs must allow members to cancel the contract for specified reasons, such as moving out of the area or a medical condition.

In conclusion, evergreen contracts are legal in California, but businesses must follow specific requirements in order to use them. It is important for consumers to read contracts carefully and understand the terms and conditions before signing up for any services or subscriptions that may renew automatically. If you have any questions or concerns about an evergreen contract, it is best to seek legal advice.