“Continue Indefinitely” Means “Not Perpetual”: Indefinite-Duration Commercial Licences Are Terminable on Reasonable Notice

1) Introduction

Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192 concerned a trade mark licence for the famous name ZAHA HADID. The claimant/appellant, Zaha Hadid Limited (the “Company”), operates an international architectural practice founded by Dame Zaha Hadid. The defendant/respondent, The Zaha Hadid Foundation (the “Foundation”), was established to preserve Dame Zaha’s work and legacy and became the licensor after her death.

The licence (dated 1 May 2013, signed in 2014) granted the Company a non-exclusive worldwide licence to use the marks, in return for a royalty of 6% of “Net Income”, defined broadly so as to apply to all services provided by the Company (not merely those using the mark). The dispute crystallised when the Company sought to renegotiate and served notice purporting to terminate on reasonable notice. The Foundation denied any such right.

Two issues arose:

  • Termination: whether clause 12, stating the agreement would “continue indefinitely” but setting out express termination rights only for the licensor, nonetheless allowed the Company to terminate on reasonable notice.
  • Restraint of trade (fallback): if the Company could not terminate, whether the arrangement was void as an unreasonable restraint of trade.

At first instance, Adam Johnson J held the contract contained no right for the Company to terminate and rejected the restraint of trade challenge—leaving the Company “locked into the contract forever”. The Company appealed.

2) Summary of the Judgment

The Court of Appeal (Sir Colin Birss C, with Peter Jackson LJ and Popplewell LJ agreeing) allowed the appeal on termination. Properly construed, clause 12.1 (“continue indefinitely”) signalled an indefinite (not perpetual) duration, and therefore a right for either party to terminate on reasonable notice should be inferred to give effect to that intention.

Because the appeal succeeded on termination, the Court of Appeal found it unnecessary to decide the restraint of trade issue and expressly preferred to leave the more difficult policy questions for a case where they mattered. It nevertheless flagged (without deciding) that trade mark licences may be a category of agreement where seemingly “restrictive” terms could be viewed as part of the accepted structure of a “trading society”.

3) Analysis

3.1 Precedents Cited

A. Construction, implied terms, and modern interpretative method

  • Wood v Capita Insurance Services Ltd [2017] AC 1173 and Sara & Hossien Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2: These authorities anchored the Court’s interpretative approach—objective meaning, contract read as a whole, iterative checking of rival meanings against text and consequences. The Court used these to frame the analysis but ultimately resolved the case by construing clause 12.1 and the structure of clause 12.
  • Virgin Aviation TM Ltd v. Alaska Airlines Inc. [2024] EWCA Civ 622: Cited below as a “convenient summary” of modern construction; the Court of Appeal in the present case applied the same unitary, iterative methodology.
  • Marks & Spencer plc v. BNP Paribas Securities Services Trust Co (Jersey) Ltd and Anor. [2015] UKSC 72, [2016] AC 742 and Tesco Stores Ltd v. Union of Shop, Distributive and Allied Workers and others [2024] UKSC 28: These cases featured because the Company initially disavowed an implied-terms argument, anticipating the difficulty of meeting the stringent modern test for implication. On appeal, however, the Company adjusted its position: if the Court regarded the analysis as involving implication, it maintained that argument. The Court’s reasoning is noteworthy: it treats the “reasonable notice” termination power as flowing directly from the constructional conclusion that the agreement is indefinite rather than perpetual—blurring (but not ignoring) the construction/implication boundary without undermining the modern strictness of implication.
  • Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988: Referred to as representing Lord Hoffmann’s earlier suggestion that implication is part of construction. The Court’s approach in this appeal is careful: it does not revive a broad “Belize” approach, but recognises that where parties’ objectively ascertained intention is “indefinite duration”, a reasonable-notice termination mechanism is the necessary juridical consequence.

B. The “indefinite vs perpetual” line of authorities (termination on reasonable notice)

The Court’s central doctrinal move was to synthesise and rationalise the older line of cases into a two-stage analysis (attributed primarily to Lord MacDermott): (1) construe whether the agreement was intended to be perpetual or merely of indefinite duration; (2) if indefinite, infer a power to terminate on reasonable notice to give effect to that intention.

  • Llanelly Railway & Dock Co. v London & Northwestern Railway Co. L. R. 7 H.L. 550: The historical foil. In Llanelly, Lord Selborne suggested a “burden” on the party alleging a non-perpetual meaning when an agreement was “indefinite and unlimited”. The Court of Appeal in Zaha Hadid rejected resolving such cases by “presumptions”, aligning with later authority.
  • Winter Garden Theatre (London) Limited v. Millenium Productions Ltd [1948] AC 173: The foundation case. Although it involved a licence and an asymmetric express termination right (licensee could terminate; licensor’s right was disputed), the House of Lords held the licensor could terminate on reasonable notice. Lord MacDermott’s two-stage reasoning—(i) not perpetual; (ii) therefore terminable on reasonable notice—was treated by Sir Colin Birss C as the best organising logic for the authorities.
  • Re Berker Sportcraft Ltd, Hartnell v Berker Sportcraft Ltd [1947] (177) Law Times 420: Jenkins J refused termination outside express cancellation triggers, reasoning that the presence of express powers could exclude further implied powers. The case served as a cautionary counterpoint: where the structure indicates intended durability subject only to defined exits, the court may find no general termination power. In Zaha Hadid, however, clause 12.1’s deliberate use of “indefinitely” pulled the other way.
  • Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd [1955] 2 QB 556: Highly influential in tone and approach. McNair J rejected presumptions of perpetuity and held the agreement determinable on reasonable notice, using “reasonableness” and (notably) mutual trust and confidence. Sir Colin Birss C endorsed the commercial intuition: in commerce, parties do not normally lock into permanent irrevocable relationships.
  • Spenborough Corporation v Cooke Sons & Co. Ltd [1968] 1 Ch 139: Buckley J characterised the inquiry as “construction” in a broad sense (ascertaining common intention) rather than merely assigning dictionary meanings to words. This supported the Court of Appeal’s willingness to treat the “reasonable notice” mechanism as the necessary completion of the parties’ objectively intended “indefinite” arrangement.
  • Staffordshire Area Health Authority v South Staffordshire Waterworks Co [1978] 1 WLR 1387: A major illustration of the “indefinite vs perpetual” fork in the road. Despite the phrase “at all times hereafter”, the Court of Appeal construed it as enduring only while the agreement subsisted, not in perpetuity—leading to terminability on reasonable notice. The decision demonstrated that even seemingly perpetual language can, in context, be read as indefinite. In Zaha Hadid, the Court emphasised the inverse: “indefinitely” is not synonymous with “perpetually”.
  • Watford Borough Council v Watford Rural Parish Council (1987) 86 LGR 524: The contrasting endpoint: the court found an intention to be bound in perpetuity, leaving “no room” to imply termination. The case underscored that the crucial first step is identifying whether the agreement is truly perpetual on its construction.
  • Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361: Used for the practical proposition that “reasonable notice” is contextual and time-sensitive; what is reasonable can change over the life of a relationship. The Court used this to neutralise arguments based on the early-life economics of the deal or Dame Zaha’s lifetime intentions.

C. Restraint of trade (raised but not determined)

  • Quantum Actuarial LLP v Quantum Advisory Ltd [2021] EWCA Civ 227: The first-instance judge used Carr LJ’s three-step framework: (i) is there a restraint in practical terms; (ii) is the covenant excluded from the doctrine; (iii) if engaged, is it reasonable in private and public interest. The Court of Appeal did not decide these points but cited the framework as the starting point below.
  • Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd [2020] UKSC 36 and Esso v Harpers Garage [1968] AC 269: Sir Colin Birss C flagged a developing policy dimension: Peninsula Securities departed from the majority in Esso and endorsed the “trading society” test articulated by Lord Wilberforce. The Court suggested (without deciding) that trade mark licences may be a class of agreement where apparently restrictive provisions are integral to the functioning of a trading society and therefore potentially outside (or differently treated within) the restraint of trade doctrine.
  • Tillman v Egon Zehnder [2019] UKSC 32 [2020] AC 154: Raised in the Respondent’s Notice on severance principles, anticipating remedial complications if only parts of the alleged restraint were struck down. The Court did not need to address it given the appeal succeeded on termination.

3.2 Legal Reasoning

A. The error identified at first instance: reading “indefinitely” as “perpetually” by structure alone

The Court of Appeal held the trial judge’s first “reason” (that the contract and context suggested the licensor should have wide termination powers and the licensee none) was an error. Trade mark licences often contain controls (quality, form of use, goodwill accrual, marketing obligations) because the licensor must protect the mark and avoid invalidity risks (including “use it or lose it” considerations). That “one-sidedness” is frequently a function of the subject matter, not an indicator that the licensee is meant to be locked in forever.

B. The decisive move: “indefinitely” is different from “perpetual”

Clause 12.1 stated the agreement “shall continue indefinitely”. The Court treated that as the natural place to find the parties’ intention as to duration, and as meaning what it says: not perpetual. It emphasised (as a general proposition) that “indefinite” and “perpetual” are not synonyms. The Court also rejected the notion that commercial agreements should be treated as perpetual by default, endorsing McNair J’s stance in Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd that the matter is not decided by presumptions.

C. The two-stage framework adopted

Sir Colin Birss C synthesised the older authorities into a structured approach:

  1. Stage 1 (construction): decide whether the agreement is intended to run in perpetuity (or in perpetuity unless terminated only by one party under specified rights), or whether it is intended to be of indefinite duration.
  2. Stage 2 (necessary consequence): if the agreement is indefinite (and no other duration mechanism exists), a power to terminate on reasonable notice must exist for the parties to bring it to an end—otherwise “indefinite” would be deprived of practical content.

Importantly, the Court acknowledged that Stage 2 could be described as an implied term, but characterised it as one that “follows directly from the true construction”. This is a careful reconciliation: it preserves modern strictness about implication (as in Marks & Spencer plc v. BNP Paribas... and Tesco Stores Ltd v. USDAW...) while recognising that some “implications” are not free-standing gap-filling exercises but the juridical completion of the parties’ objectively ascertained intention.

D. Why the licensor’s express termination rights did not exclude the licensee’s reasonable-notice right

The Foundation argued (and the trial judge accepted) that clause 12.2 and 12.3 (licensor termination rights) meant they were the only termination routes. The Court of Appeal disagreed, for three main reasons:

  • No inconsistency: A licensee’s reasonable-notice right is not inconsistent with a licensor’s specific rights (three months without cause, immediate for default).
  • Different functions: Clause 12.3 addresses immediate termination for serious default; it does not naturally speak to an orderly no-fault exit for a party wishing to end an indefinite relationship.
  • Textual structure (“unless”): Clause 12.1 uses “indefinitely” as the baseline position, and the termination rights operate as exceptions to that baseline; they do not rewrite “indefinitely” into “forever”.

The Court also treated the “expressio unius” style maxim (as referenced in Lewison) as a relevant factor but not decisive; modern construction requires iterative testing against sense, context, and consequences.

E. Commercial sense: perpetual lock-in made little objective sense

The Court stressed the implausibility of a perpetual commitment for an independent professional practice to “promote” and align itself with a brand across decades or centuries. It gave concrete examples (e.g., reputational damage from later-discovered defects in iconic buildings, changing architectural tastes) illustrating why the objectively reasonable interpretation of “indefinitely” is “until brought to an end”, not “forever”.

F. Factual matrix points (Respondent’s Notice) treated as marginal

The Foundation’s contextual points—Dame Zaha’s income intentions, expectation the Company would trade under the name indefinitely, and 2023 correspondence not complaining about lock-in— were held not to shift the construction. The Court notably treated “reasonable notice” as time-dependent: that the arrangement was intended to provide income during Dame Zaha’s lifetime did not imply an irrevocable relationship, because “reasonable notice” could have been longer earlier in the relationship.

3.3 Impact

A. Drafting consequences for licences and other “no fixed term” commercial contracts

The decision underscores that:

  • Expressly stating an agreement “continues indefinitely” is a strong indicator it is not perpetual.
  • If parties truly intend a one-way perpetual lock-in (or termination rights for one side only), they must draft with clarity—e.g., by using explicit language excluding termination by the other party, or by providing a clear duration and renewal mechanism.
  • Enumerating termination rights for one party does not automatically exclude a reasonable-notice termination right for the other, where the agreement is otherwise objectively indefinite.

B. Doctrinal clarification: “indefinite” triggers a termination mechanism

The Court’s articulation at [40]–[41] is likely to be cited as a clarifying statement of principle: once a court concludes an agreement is indefinite rather than perpetual, a reasonable-notice termination power follows as a necessary consequence. This provides a structured way to reason through older authorities that sometimes oscillated between “construction” and “implication”.

C. Restraint of trade: an open door for future trade mark licence litigation

Although the restraint of trade grounds were left undecided, the Court’s obiter remarks are important. By noting the “trading society” test and suggesting trade mark licences may be a paradigm example of arrangements with inherent restrictions, the judgment invites future argument about:

  • Whether (and when) the restraint of trade doctrine should apply to brand-protection obligations typical in IP licensing; and
  • How Peninsula Securities Ltd v Dunnes Stores (Bangor) Ltd reshapes that threshold inquiry.

Parties challenging trade mark licence terms on restraint-of-trade grounds may now face an additional conceptual hurdle: that such terms are part of the ordinary architecture of commercial life rather than suspect restraints.

4) Complex Concepts Simplified

  • “Indefinite” vs “perpetual”: “Indefinite” means the contract has no fixed end date, but it can still end (typically by notice). “Perpetual” means it is intended to last forever (or forever for a given party) unless the contract itself clearly provides otherwise.
  • Termination on “reasonable notice”: If a contract has no fixed term and is indefinite, the law commonly treats it as terminable by giving notice that is “reasonable” in the circumstances at the time notice is given (considering, for example, reliance, transition time, market realities, and the nature of the relationship).
  • Construction vs implied terms: “Construction” is interpreting what the parties objectively meant by the words used. “Implied terms” are unexpressed terms inserted by the court only under strict conditions. This case shows an intermediate idea: if, on construction, the contract is indefinite, a termination mechanism is the necessary consequence of that construction.
  • Restraint of trade doctrine: A public policy doctrine that can invalidate contractual provisions that unreasonably restrict a party’s freedom to trade, unless justified. The Court did not decide it here.
  • “Trading society” test: A way to ask whether a restriction is of a kind that is an accepted, ordinary incident of commerce—potentially meaning the restraint of trade doctrine is not engaged (or is engaged differently). The Court suggested trade mark licensing may fit this category but did not decide the point.
  • Trade mark “use it or lose it”: Trade marks can become vulnerable if not genuinely used. Licensors therefore often require licensees to use and promote the mark and to comply with quality controls—restrictions that protect the mark’s validity and goodwill.

5) Conclusion

Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192 establishes a practically significant clarification: where a commercial agreement states it will “continue indefinitely”, the court is likely to treat it as not perpetual, and—absent contrary indicators—to infer a right for either party to terminate on reasonable notice, even if the contract enumerates express termination rights for only one side.

The judgment both rationalises the older termination-on-notice authorities through a two-stage framework and signals (without deciding) a potentially important future debate about how restraint of trade principles should apply to the inherently restrictive architecture of trade mark licensing.