Can ‘indefinite’ contracts really last forever?

Susan Honeyands, Partner

Long‑term commercial relationships are often documented in contracts described as continuing ‘indefinitely’. For many businesses, that wording can create either a sense of permanence or a concern about being locked into an arrangement.

A recent Court of Appeal decision in Zaha Hadid Ltd v Zaha Hadid Foundation [2026] provides timely and commercially important guidance on what ‘indefinite’ means, and when seemingly open‑ended agreements can be terminated. The judgment reinforces a principle that many commercial parties assume, but which is not always reflected clearly in drafting: indefinite does not mean perpetual.

Background

The case concerned a long‑running trademark licence. The licence stated that it would continue ‘indefinitely’ and included express termination rights for only one party. When the other party sought to terminate on notice, it was argued that the agreement could not be brought to an end at all.

At first instance, that argument succeeded. However, the Court of Appeal (CoA) took a different view, overturning the original decision and restoring what it described as a commercially realistic interpretation of the contract.

The CoA confirmed that:

• there is an important difference between a contract with no end date and one intended to last forever; and
• courts will not lightly assume that parties intended to give up their ability to exit a commercial relationship altogether.

‘Indefinite’ is not the same as ‘perpetual’

A central theme of the judgment is the distinction between:

• contracts that are open‑ended; and
• contracts that are genuinely perpetual.

While parties are free to agree a perpetual or irrevocable arrangement, there is a requirement for clear and express wording before such an intention will be found. In the absence of that clarity, the default assumption is that the contract can be terminated on reasonable notice.

This reflects a basic principle of commercial common sense: permanent obligations are unusual and should not be inferred without strong evidence.

One‑sided termination clauses: not the end of the story

The contract in this case contained express termination rights, but only for one party. It was argued that this showed the parties must have intended to exclude any termination rights for the other side.

The Court of Appeal rejected that argument. It confirmed that:

• giving one party express termination rights does not automatically strip the other party of rights arising under the law; and
• if parties intend to exclude a right to terminate an indefinite contract, they must do so clearly and explicitly.

Deliberate silence is unlikely to be enough.

What counts as ‘reasonable notice’?

Although the precise notice period will always depend on the facts, the Court agreed that 12 months’ notice was reasonable in this case. Relevant factors included:

• the length of the commercial relationship;
• the scale of investment and financial commitment involved; and
• the degree of reliance placed on the agreement.

This reinforces that ‘reasonable notice’ is a flexible concept, focused on fairness and commercial reality rather than rigid time limits.

Why does this matter for businesses?

This decision goes beyond licensing arrangements. Many supply, distribution, services and framework agreements are deliberately left open‑ended to allow flexibility.

The case confirms that:

• businesses will not usually be trapped indefinitely by contracts with no fixed term; but
• unclear drafting can still create real uncertainty, leverage disputes, and litigation risk years down the line.

Relying on assumptions about what ‘indefinite’ means is risky, particularly where contracts are commercially valuable or heavily relied upon.

If you are considering amending a contract or would like us to assist in reviewing a contract for you, please contact our commercial team on 0161 832 3434, or email us at [email protected].

Contributors: Bradley Bennett