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§ 13 of 15

Term and renewal

The term clause sets how long the agreement runs; the renewal clause says what happens at the end. A long term with a fixed price is a bet on the market. An automatic renewal with a short notice window can lock you in for another full term if nobody diarises the date.

Updated · Not legal advice

13.1

How long do recycling agreements run?

Public examples range widely. Steuben County, NY's 2020 marketing bid covered one calendar year. The Connecticut contract at the centre of a 2019 dispute ran to June 30, 2020, with an option for the facility owner to extend it a further year. Equipment bundles usually push terms longer.

13.2

What about automatic renewal?

An "evergreen" clause renews the agreement for another term unless either side gives notice in a window before expiry. Prefer renewal by agreement, or a renewal that becomes month to month. If the clause stays, put the notice date in the contract summary and in a calendar.

13.3

Should a long term have a price review?

Yes, if the formula is fixed. An index formula reviews itself monthly; a flat price does not. A review date each year, with a right to end the agreement if no new price is agreed, keeps a long term honest.

13.4

Sample wording

Illustrative wording to adapt. Brackets are choices to make.

13.1 Term. This Agreement runs for [12] months from [date]. It then continues month to month until either party gives [30] days’ written notice.

13.5

What to negotiate

  • Match the term to the equipment, not the other way round.
  • Replace automatic renewal with month-to-month continuation.
  • Add an annual price review to any flat price.

Red flags in a draft

  • Renewal for the full original term with a 90-day notice window.
  • A term that restarts when equipment is replaced.
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Questions

Do recycling contracts auto-renew?
Many do. Look for the notice window before expiry, and ask for month-to-month continuation instead.

Sources

  1. RFP PW-21-005-P, Marketing of Recyclable Materials and Scrap Metal: bid tabulation, Steuben County, New York, bid date November 12, 2020.
  2. Republic files suit over Connecticut contamination, Resource Recycling, June 4, 2019.