Sunset Clause

A sunset clause is a provision in a contract that stipulates that the agreement will terminate on a certain date unless both parties agree to extend it. In other words, the contract automatically expires unless both sides take action to keep it going.

Sunset clauses are often used in leases and other types of agreements where one party wants to protect their interests in case the other party decides not to renew the agreement. For example, if you’re renting an apartment, the landlord may include a sunset clause in your lease so that they can increase the rent or make changes to the terms of your agreement at the end of the lease period.

While sunset clauses can be beneficial for both parties, they can also lead to disagreements and conflict if one party wants to extend the agreement but the other does not. If you’re involved in a contract with a sunset clause, it’s important to communicate with the other party well in advance of the expiration date to avoid any misunderstandings.