Can you exit an “indefinite” contract?

This question recently came before the Court of Appeal in Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192, who found that the Company, Zaha Hadid Ltd, could terminate the agreement, despite not having an express right to do so under the agreement, and where the term of the agreement was stated to continue “indefinitely”.

This decision means that those entering into, reviewing, or looking to exit agreements in similar circumstances should review the agreement wording, to see whether it reflects what they consider the intention of the parties to be, and what rights may be available to them.

Background

The case concerned a licence to the trade marks in the late Dame Zaha Hadid’s name held by the Zaha Hadid Foundation (as licensor, following her death) and the company Zaha Hadid Limited (as licensee). 

Under the licence agreement, which was stated to continue indefinitely, the Company was paying a royalty of 6% of all net income to the licensor Foundation. The Company wanted to continue using the trade marked name but wanted to renegotiate the agreement, as it said the licence fee was too high. The Company argued that it should be able to terminate the agreement on reasonable notice and/or that the agreement was void as an unreasonable restraint of trade.

Relevant wording

The licence agreement set out its term as follows:

‘This agreement shall commence on the Effective Date and shall continue indefinitely, unless terminated earlier in accordance with this clause 12.’ (clause 12.1)

The remainder of clause 12 then gave the licensor Foundation certain rights to terminate, but no such rights were given to the licensee Company.

Judgments to date and status

In the High Court, the judge ruled that the Company had no right to terminate, and rejected the restraint of trade argument. The Company appealed both points. The Court of Appeal then agreed with the Company as to the interpretation of the agreement wording, being that the Company had a right to terminate the agreement on reasonable notice. The Court of Appeal did not address the question of restraint of trade as it was then unnecessary to do so. The Foundation lodged an application for permission to appeal to the Supreme Court on 22 April 2026, which at the time of writing (7 May 2026) has not yet been granted.

If the Company’s appeal is granted and the case comes before the Supreme Court, it is possible that the Supreme Court will take a different view to that of the Court of Appeal as set out below.

Judgment reasoning

The Court of Appeal highlighted:

• In a commercial context, parties don’t usually lock themselves into permanent relationships. Unless there is very clear language, the Court would not assume that commercial parties intend their relationship to be irrevocable.
• In the context of this case, a perpetual trade mark licence would lose sense over time. Under a trade mark licence, the licensor has an ongoing interest in ensuring the trade mark is used properly. Here the Company as licensee also had a positive obligation to promote and expand the services under the name (the use of the name being for the architectural practice), but in future the Company may wish to change its name, or may not want to use the name following any reputational damage or loss of goodwill in the name.
• “Indefinite” is not the same as “perpetual”. Unlike a perpetual agreement, which continues forever, an agreement of “indefinite” duration is able to be brought to an end at some unspecified time in the future.

The Court of Appeal therefore determined that in these circumstances, the licensee Company should have a right to terminate the agreement on reasonable notice.

Practical implications

For anyone entering into long‑term agreements:

1. When drafting or reviewing the agreement, consider the intention of the parties:
   1. Do the parties want the agreement to continue forever? Or want only one side to be able to terminate? It is uncommon and usually inadvisable for parties to bind themselves forever, so consider the “get-outs” needed by either side, e.g. giving a party the right to terminate the agreement subject to paying minimum charges.
   2. If one party is a (natural) person, do the parties intend the agreement to continue after their death (where legally possible) or to be passed on to another person? Consider whether assignment of the rights under the agreement should be restricted in the agreement wording.
2. If permanence is intended, use express language:
   1. Clear wording is required for “perpetual” obligations. Words like “indefinite” or “continuing” are not the same as “perpetual”, and are unlikely to result in an agreement being considered permanent without other language suggesting permanence.
3. If rights to terminate are wanted (or not), clearly specify these:
   1. If it is intended that a party should have no right to terminate the agreement, then whilst it can be tempting for the other party to stay silent (and this can have its advantages commercially), for enforceability purposes it is preferable to use clear language. Silence on termination can expose an agreement to implied termination rights (this case reinforces the principle of a party being able to terminate on reasonable notice where no termination right is specified).

For anyone with existing long-term agreements:

1. Consider reviewing the wording used in any existing long-term agreements, especially licences to intellectual property rights under which ongoing royalties are payable. If you have concerns with the wording used, you may want to clarify or supplement the agreement wording to make the intention of the parties clear.
2. Commercially, note that agreements stated to continue “indefinitely” risk being terminable, so future revenue from charges payable under any such agreements may not be guaranteed.

For anyone looking to exit or renegotiate indefinite agreements:

1. If you are unhappy with an existing agreement that is stated to continue “indefinitely”, you may be able to argue a right to terminate on reasonable notice (the length of such notice being dependent on the circumstances at the time of giving the notice). The Courts remain willing to imply termination rights where it would not make commercial sense for the parties to be bound forever.