What Happens if a Contract Does Not Specify an End Date?

Overview

In Zaha Hadid Limited v The Zaha Hadid Foundation¹ the Court of Appeal considered a licence governing an ongoing commercial relationship which did not specify an end date and only provided one party with an express termination right. The Court of Appeal concluded that, properly construed, this was not a perpetual contract; rather, it was a contract of an indefinite term, with a right to terminate on reasonable notice.²

This decision provides helpful guidance as to how to interpret contracts with no clear end date and/or termination provisions under English law. The Court of Appeal reaffirmed the "two-stage test" set out in Winter Garden Theatre³ namely to consider (i) whether, on the proper construction, the contract is terminable at all (rather than irrevocable or perpetual), and (ii) if terminable, what period of notice is reasonable in the circumstances before termination takes effect.

In reaching its decision, the Court of Appeal rejected an argument that because only one party had been given an express termination right in the licence, it should be implied that it was intended that the other party was not entitled to terminate on reasonable notice.

Background

The licence, dated 1 May 2013, was originally between Dame Zaha Hadid and her architecture practice, Zaha Hadid Limited (the "Company"), with the Company paying a 6% royalty on net income from services broadly defined to cover its entire output. The licence was intended to govern an ongoing, enduring commercial relationship, but it did not fix an end date.

On Dame Zaha Hadid's death in March 2016, her trademarks passed to The Zaha Hadid Foundation (the "Foundation"), which became licensor. The Company later sought to renegotiate the royalty, asserting a right to terminate on reasonable notice, which the Foundation disputed.

The licence stated that it would continue "indefinitely" unless terminated earlier and gave the Foundation a right to terminate on three months' notice or immediately for default. It did not contain an express termination right for the Company.

At first instance, the High Court held there was no implied term entitling the Company to terminate on reasonable notice. The Company argued this left it "locked into the contract forever" and appealed.

Indefinite vs. Perpetual

The Court of Appeal drew a distinction between indefinite contracts and perpetual contracts: an intention that a contract be long term does not, without more, make it perpetual.

Lord Justice Birss, noted "to describe the duration of a contract as indefinite is a fundamentally different thing from describing it as perpetual. They are not synonyms" (paragraph 45). An indefinite duration, a contract with no fixed end date but one that contemplates that the contract can be ended at some unspecified future time, is fundamentally different from a perpetual contract, where the parties' intention is that the agreement runs forever, for one or both parties, leaving no room to infer a right to terminate on reasonable notice.

The Court of Appeal held that, as a matter of construction, the parties had intended the contract to be of indefinite, not perpetual, duration, and that a power to terminate on reasonable notice should be inferred. It applied the two-step reasoning in Winter Garden Theatre namely:

1. Construe the parties' common intention as to whether the agreement was meant to run in perpetuity. If it was not and no other duration is specified, the duration is indefinite; and
2. If indefinite, infer that all parties have the ability to terminate on reasonable notice, as that is the only way to give effect to a common intention that the contract is not perpetual.

Applying this test, the Court of Appeal noted that the licence used the word "indefinitely," not "perpetually," which was "not a promising start" for the Foundation's case. Moreover, it observed that it would be commercially odd to bind the Company to promote the Zaha Hadid brand for one hundred years.

Interestingly, the Court of Appeal also rejected the Foundation's reliance on the expressio unius principle, as express termination rights for the Licensor alone did not indicate a deliberate exclusion of any right for the Company. The Court of Appeal treated expressio unius as a factor to consider rather than as determinative and considered that a power to terminate on reasonable notice was not inconsistent with the clauses in the contract.

The Court of Appeal confirmed that reasonable notice is assessed by reference to the circumstances prevailing when notice is given, not at the date of formation, and accepted that one year's notice given by the Company in 2024 was reasonable based on the circumstances at the time.

Lord Justice Birss summarised the applicable principles:"[A]n agreement intended to be of indefinite duration necessarily and within its own terms contemplates that it can be brought to an end at some unspecified time in the future…The only way to give effect to a common intention that the agreement is for both parties of indefinite duration and not perpetual, would be that all parties had the ability to bring it to an end – i.e. to terminate on reasonable notice" (paragraph 43).

Key Takeaways

• Express termination rights for one party will not necessarily exclude inferred rights for the other. Providing only one party with an express right to terminate will not, without more, prevent the other from arguing for an inferred right to terminate on reasonable notice.
• Avoid ambiguity between "indefinite" and "perpetual." If the intention is that a contract should be incapable of termination by one or both parties (except for breach), this must be stated clearly. Omitting a termination right for one party will not necessarily achieve that result.
• Specify a fixed notice period. Parties that wish for a specific notice period to apply should specify it in the contract, in order to avoid future disputes as to what is "reasonable" in changed circumstances.
• Consider the commercial context. Courts will assess termination provisions in the commercial context. Clauses that lock a party into an indefinite obligation without any means of exit may be difficult to justify.

 

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¹ [2026] EWCA Civ 192 (27 February 2026)

² On 8 July 2026, the Foundation's application for permission to appeal to the Supreme Court was refused. 

³ Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1946] 1 All ER 678