No contract should last forever – what case law teaches us about escaping long‑term deals

For many co‑operatives, long‑term commercial contracts are the backbone of day‑to‑day operations and a thriving business ecosystem. Whether it’s an IT platform or a software licence, these agreements are often signed with the honest intention of creating stability and continuity. But problems arise when co‑operatives discover, sometimes years down the line, that they are effectively trapped in a contract that no longer works for them and with no obvious way out.  

The Court of Appeal’s decision in Zaha Hadid Ltd v Zaha Hadid Foundation [2026] EWCA Civ 192 is a timely reminder that no contract should be assumed to last forever, even where termination rights appear one‑sided or incomplete. 

 The dispute: a trademark licence that only one side could exit 

The case involved a licence of indefinite duration. The agreement included several termination rights for the licensor but none whatsoever for the licensee, who remained bound to pay an ongoing royalty in exchange for using the trademark “ZAHA HADID”. When the licensee sought to bring the arrangement to an end, it had no contractual means to bring the relationship to an end and needed the Court to plug the gap. In the first instance, the High Court took a strict view of the wording and ruled that the absence of an express exit route meant the licensee was bound to the contract, for the indefinite term. 

This is a situation that many co‑operatives may find familiar: a contract has rolled on far longer than expected, the commercial context or operational need has changed, but the agreement simply doesn’t say how, or if, you can walk away. 

 The Court of Appeal’s shift in approach 

The Court of Appeal looked at the arrangement through a more commercial, practical lens. The key question was whether the parties intended this relationship to be everlasting. If not (and very few commercial contracts are genuinely intended to last for eternity), then the law will generally treat the agreement as terminable on reasonable notice, even if the drafting is silent. The judgment recognises a fundamental truth about commercial relationships: they evolve. Businesses rebrand, technology becomes outdated, priorities shift, financial models change. To assume the parties intended to bind themselves together indefinitely, without a clear and deliberate statement to that effect, would rarely reflect commercial reality. 

 What counts as “reasonable notice”? 

The appropriate timeframe will always depend on the facts: the nature of the contract, how long it has operated, the investments made, and the impact of ending it. In this case, both parties agreed that 12 months would be reasonable, but other contracts may justify a longer (or shorter) period. The key point is that silence is not the end of the analysis. The Court can and will step in where the drafting does not reflect the parties’ true commercial intentions at the time the contract was entered into. 

 Why this matters for organisations today  

The judgment does not change the current legal position but offers an important, practical reminder on how the Courts can solve contracting problems. That can be reassuring for a co‑operative tied into an indefinite term that no longer reflects how they operate today.  

The difficulties in this dispute only arose because the drafting failed to deal clearly with how and when the parties could walk away. As a reminder, the Courts will not overturn a bad bargain and so will not normally introduce clauses that allow one party to exit early where there is an agreed end point or exit mechanism. However, they can step in to ensure the parties can bring a contract to an end in a commercially sensible way, where the terms fail to do so.  

Key takeaway 

A well‑drafted exit clause is one of the simplest protections an organisation can build into a contract. It avoids the cost, uncertainty and delay of litigation and provides the flexibility needed in a constantly changing commercial landscape.  

Where co‑operatives want to balance the certainty of fixed terms with the flexibility of an indefinite term, it is worth thinking about an initial period or minimum term before implementing rolling renewals. This will allow them to continue working with their chosen partners as long as the relationship works well for both sides – and also offers a sensible route to exit once the arrangement has run its course.