Paragraph V Waiver Confirmed; “Until Subsequent Agreement” Clauses Create At‑Will, Indefinite Contracts — Commentary on State of Georgia v. Dovetel Communication, LLC

Paragraph V Waiver Confirmed; “Until Subsequent Agreement” Clauses Create At‑Will, Indefinite Contracts — Commentary on State of Georgia v. Dovetel Communication, LLC

Introduction

In State of Georgia v. Dovetel Communication, LLC (Supreme Court of Georgia, Sept. 30, 2025), the Court resolved two issues at the intersection of public contracts and constitutional litigation against the State:

  • It reaffirmed and clarified the scope of the 2020 constitutional waiver of sovereign immunity for suits seeking declaratory relief (Ga. Const. of 1983, Art. I, Sec. II, Par. V(b)(1)), holding that the waiver applies when plaintiffs seek declaratory relief from alleged unconstitutional or unlawful acts by a state department; plaintiffs need not plead, much less obtain, a specific declaration that the acts are unlawful for the waiver to attach.
  • It held that right-of-way contracts containing a duration clause stating they “shall remain in full force and effect until [GDOT] and [the provider] enter into a subsequent agreement” are contracts of indefinite duration and therefore terminable at will by either party upon notice under longstanding Georgia law governing continuous-performance agreements without a definite term.

The case arose after the Georgia Department of Transportation (GDOT) amended its utility accommodation rule to, among other changes, increase annual right-of-way permit fees. When GDOT pressed broadband providers to execute new contracts reflecting the new regime, the providers refused and sought declaratory and injunctive relief, including declarations that their contracts were not terminable at will and that GDOT’s actions would impair contracts in violation of the U.S. and Georgia Constitutions. The trial court denied the State’s sovereign-immunity defense and granted summary judgment to the providers; the Supreme Court affirmed the sovereign-immunity ruling but vacated the merits judgment, concluding the agreements are terminable at will.

Summary of the Opinion

  • Sovereign immunity: Waived under Article I, Section II, Paragraph V(b)(1) for the providers’ suit seeking declaratory relief from GDOT’s acts allegedly in violation of the U.S. and Georgia Constitutions (including impairment of contracts). The provision waives immunity for actions “seeking declaratory relief from acts” that are unlawful or unconstitutional; it does not require that plaintiffs seek, or that a court issue, a separate declaration of unlawfulness as a condition of the waiver.
  • Merits — contract duration and termination: The duration clause—“shall remain in full force and effect until [the parties] enter into a subsequent agreement regarding the subject matter”—renders the contracts of indefinite duration because the termination event is wholly contingent on a future agreement that may never occur and is effectively within one party’s discretion. Under Georgia’s default rule for continuous-performance contracts with no definite term, such contracts are terminable at will by either party upon notice (Electric R. Co. v. Tenn. C., I. & R. Co., 98 Ga. 189 (1896), and progeny).
  • Disposition: The Court affirmed the trial court’s ruling on sovereign-immunity waiver; vacated the declaratory and injunctive relief on the merits; and remanded for further proceedings, leaving open the providers’ alternative arguments (not briefed to the Court) for the trial court to consider on remand.

Background

Broadband providers use public rights of way to deploy infrastructure. Their access was governed by written right-of-way permits and contracts with GDOT, which set annual fees and operational rules. Each contract said it would govern over conflicting rules or policies and “remain in full force and effect until [GDOT] and [the provider] enter into a subsequent agreement regarding the subject matter.”

In 2021 GDOT amended Ga. Comp. R. & Regs. r. 672-11-.04, including a higher fee schedule, and later notified providers to enter new agreements by September 2023. When providers refused, GDOT warned that as of November 1, 2023, non-signers would be subject to the new rules despite contrary contractual fee terms. Providers sued the day before the deadline, seeking declarations that the duration clause is enforceable; that the contracts are “perpetual” and not terminable at will; and that the agreements amount to a perpetual easement. They alleged that GDOT’s actions would impair their contracts in violation of the U.S. Contracts Clause and its Georgia analogue. The State moved to dismiss on sovereign-immunity grounds; the trial court denied the motion and granted summary judgment for providers. The Supreme Court took the case on a constitutional question transfer.

Analysis

Precedents Cited and Their Influence

  • Sovereign immunity waiver under Paragraph V:
    • Kuhlman v. State, 317 Ga. 232 (2023): Clarifies that Paragraph V’s waiver turns on whether the pleadings show a suit “seeking declaratory relief from acts” alleged to be unlawful or unconstitutional. The Court here relied on that framework to reject the State’s argument that a plaintiff must seek a specific declaration that the acts are unlawful.
    • McBrayer v. Scarbrough, 317 Ga. 387 (2023): Cited for de novo review of sovereign-immunity rulings.
    • Cobb County v. Floam, 319 Ga. 89 (2024): Though not controlling on the waiver itself, the Court noted that the Declaratory Judgment Act’s threshold requirements are separate from the constitutional waiver analysis. The Court flagged, but did not decide, DJA threshold issues because they were not before it.
  • Contracts of indefinite duration; at-will termination for continuous performance:
    • Electric R. Co. v. Tenn. C., I. & R. Co., 98 Ga. 189 (1896): The foundational Georgia rule. Continuous-performance contracts with no definite duration (and no term fixed by law or usage) are terminable at will by either party upon notice. The Court revived and applied this principle to modern right-of-way contracts.
    • Supporting Court of Appeals line: Lederle v. Atlanta, 164 Ga. 440 (1927); Blackstock v. Atlanta Newspapers, 94 Ga. App. 313 (1956); Ely v. Stratoflex, 132 Ga. App. 569 (1974); Atlanta Dairies Co-Op v. Grindle, 182 Ga. App. 409 (1987); Voyles v. Sasser, 221 Ga. App. 305 (1996); Jones v. Destiny Indus., 226 Ga. App. 6 (1997); Pickle Logging, Inc. v. Ga. Pac. Corp., 276 Ga. App. 398 (2005); Poole v. In Home Health, LLC, 321 Ga. App. 674 (2013). The Court used these to illustrate examples of definite vs. indefinite terms and to validate the at-will termination default in Georgia.
    • Definite terms by time or objective event: F & F Copiers, Inc. v. Kroger Co., 194 Ga. App. 737 (1990) (three-year term); Heritage of Lanier, Inc. v. Akins, 216 Ga. App. 280 (1995) (term ends at a defined amount of compensation or after specified contingencies). These show how to draft definite durations.
    • Indefiniteness where end event may never occur or is discretionary: Moran v. NAV Serv., 189 Ga. App. 825 (1989) (no basis to determine end date); Barker v. CTC Sales Corp., 199 Ga. App. 742 (1991) (termination upon insolvency—uncertain, indefinite); Ga. Power Co. v. Busbin, 242 Ga. 612 (1978) (employment “until retirement date” is indefinite). The Court analogized the “until subsequent agreement” clause to this category.
    • “Permanent” employment and similar terms: Bentley v. Smith, 3 Ga. App. 242 (1907); Ely; Atlanta Dairies; Pickle Logging—“permanent” agreements are indefinite and terminable at will.
    • Single-performance contracts: Read v. GHDC, Inc., 254 Ga. 706 (1985) (when a contract contemplates a single performance but lacks a time, courts imply a reasonable time; different default rule than continuous-performance agreements).
  • Enforceability versus terminability; vagueness decisions distinguished:
    • State of Georgia v. Federal Defender Program, Inc., 315 Ga. 319 (2022); Mori Lee, LLC v. Just Scott Designs, Inc., 325 Ga. App. 625 (2014); Alexis, Inc. v. Werbell, 209 Ga. 665 (1953): These cases address whether a contract fails for indefiniteness (vagueness). The Court distinguished them, explaining that a contract can be enforceable yet indefinite in duration—and thus terminable at will. The issue here was terminability, not voidness for uncertainty.
    • Harris County v. Penton, 211 Ga. App. 498 (1993); CAG Food Servs. v. Shaver Foods, LLC, 2019 WL 12762541 (N.D. Ga. 2019) (applying Georgia law): Used to show that when the end event is subject to a party’s future decision, duration is indefinite and at-will.
  • Other points:
    • Coffee Butler Serv., Inc. v. Sacha, 258 Ga. 192 (1988): Cited in describing GDOT’s indication that it would no longer abide by the existing terms; relevant to contract impairment framing.
    • Art. I, Sec. II, Par. IX(c) (separate contract waiver): The Court noted but did not apply the distinct constitutional waiver for “any action ex contractu for the breach of any written contract” by the state; providers did not rely on it.
    • Iraola & Cia., S.A. v. Kimberly-Clark Corp., 325 F.3d 1274 (11th Cir. 2003), and Coffee v. GMAC, 5 F. Supp. 2d 1365 (S.D. Ga. 1998): Cited as federal articulations suggesting possible exceptions when parties expressly condition termination on specified defaults; the Georgia Supreme Court expressly declined to decide such caveats here.
    • King v. King, 354 Ga. App. 19 (2020); Mitsui Marine & Fire Ins. Co. v. Hanjin Shipping Co., 279 Ga. App. 689 (2006): Cited for the principle that parties can contract around default rules by express language. Not applied here, because no such language existed.

Legal Reasoning

1) Sovereign Immunity Waiver Under Paragraph V(b)(1)

The constitutional text waives sovereign immunity for “actions in the superior court seeking declaratory relief from acts of” the state, its departments, agencies, officers, or employees “outside the scope of lawful authority or in violation of the laws or the Constitution of this state or the Constitution of the United States,” and authorizes injunctive relief only “after awarding declaratory relief” to enforce the judgment.

Applying Kuhlman, the Court held the waiver attached because the providers pleaded a request for declaratory relief from GDOT’s acts alleged to impair existing contracts in violation of the U.S. and Georgia Constitutions. Critically, the Court rejected the State’s argument that plaintiffs must seek a standalone declaration that the acts are unlawful as a condition precedent to waiver. The waiver hinges on the nature of the action (seeking declaratory relief from allegedly unlawful acts), not on the specific phrasing of the requested declaration or on an actual merits determination at the threshold.

The Court also clarified that waiver analysis is distinct from the Declaratory Judgment Act’s justiciability requirements (Cobb County v. Floam). Whether the suit satisfies DJA thresholds is a separate question not before the Court.

2) Contract Duration; At‑Will Termination for Continuous-Performance Agreements Without a Definite Term

Reviving a line of Georgia law dating to 1896, the Court reiterated the default rule: If a contract calls for continuous performance but does not specify a definite duration (and no time is fixed by law or usage), either party may terminate at will upon notice (Electric R. Co.). A “definite” duration can be expressed by:

  • Time: a fixed term (e.g., three years) or a fixed end date, or
  • Objective event: a specified occurrence that must happen and provides a discernible end point (e.g., payment of a defined sum under stated contingencies).

Conversely, duration is “indefinite” if the contract either:

  • Provides no basis to identify an end date, or
  • Ties the end to an event that might never occur or is within a party’s unilateral discretion (e.g., “permanent” employment; “until retirement”; “until insolvency”; “as long as dealer stays committed”).

The GDOT clause—“shall remain in full force and effect until [GDOT] and [the provider] enter into a subsequent agreement regarding the subject matter”—falls squarely in the latter category. Whether and when a “subsequent agreement” will ever be executed is wholly uncertain and effectively contingent on a party’s discretion. That makes the term indefinite; hence, the contracts are terminable at will upon notice.

Importantly, the Court distinguished “terminability” from “enforceability.” A contract lacking a duration term is not necessarily void for indefiniteness. Georgia law supplies default rules to fill the gap: at-will termination for continuous performance, and a reasonable time for single-performance contracts (Read v. GHDC). The contracts here remain enforceable while in effect; they are simply subject to termination at will with notice.

The Court acknowledged, but did not decide, potential caveats. Parties can contract around default rules by express language (King; Mitsui Marine). Some federal decisions predict that Georgia courts may infer a limitation on at-will termination if the contract expressly conditions termination on specified defaults or performance failures (Iraola; Coffee v. GMAC). No such language exists in these right-of-way contracts, and the Court found no reason to depart from the default rule.

3) Relief and Remand

Because the trial court misclassified the contracts as not terminable at will, the Supreme Court vacated the declaratory and injunctive relief. It did not reach:

  • Whether the trial court’s injunction complied with Paragraph V’s sequence and necessity requirements (“only after awarding declaratory relief” and “to enforce its judgment”), or
  • Any alternative arguments the providers might have (the Court noted briefing did not make clear how at-will terminability affects those theories), leaving them for remand.

Impact

A. Public Contracting and Regulated-Industry Agreements

  • Right-of-way, franchise, and utility accommodation agreements that use “until replaced by a subsequent agreement” or similar language are now clearly treated as indefinite and thus terminable at will, absent express contrary terms. Agencies and vendors relying on such boilerplate should expect that either side may end the contract with notice.
  • Clauses stating the contract “governs over conflicting rules or policies” do not overcome the at-will termination default when the duration is otherwise indefinite. If the agency terminates and implements new rules, the old contractual protections may cease to bind the agency once proper notice is given.

B. Drafting Imperatives

  • To avoid at-will status, drafters should include a definite term by date or length, or tie termination to objective, non-discretionary events. Examples:
    • “This Agreement commences on [date] and expires on [date] unless earlier terminated for cause as provided below.”
    • “This Agreement terminates upon completion of payment of $200,000 as set forth in Section 3, or eight years from the Effective Date, whichever occurs first.”
  • If at-will is acceptable but parties desire predictability, include notice periods (e.g., 90 days) and wind-down mechanisms. Without such terms, immediate or short-notice termination may be permissible.
  • If the intent is “no termination except for cause,” say so expressly and enumerate the exclusive grounds and procedures for termination. Consider adding a non-impairment clause and clarifying the contract’s primacy vis-à-vis later agency rule changes, while recognizing constitutional and statutory limits.

C. Litigation Strategy Post-Paragraph V

  • Paragraph V(b)(1) provides a robust path to pursue declaratory relief against alleged unconstitutional or ultra vires acts by state entities. Plaintiffs need not plead a special “unlawfulness” declaration to obtain the waiver; it is enough that the pleadings seek declaratory relief from alleged unconstitutional or unlawful acts.
  • Nevertheless, plaintiffs must still satisfy the Declaratory Judgment Act’s justiciability/doctrinal requirements; Paragraph V’s waiver is not a merits determination or a substitute for DJA thresholds.
  • Injunctive relief remains conditioned on first obtaining declaratory relief and being necessary to enforce that declaration; litigants should structure remedies accordingly.

D. Contract Clause and Government Rule Changes

  • Where a government claims the power to apply new rules to existing contracts, the Contract Clause analysis depends on whether a contract right has vested and the extent of impairment. If the contract is terminable at will, the scope of any impairment claim narrows markedly; termination according to default rules may defeat claims of unconstitutional impairment.
  • Agencies contemplating regulatory changes that conflict with existing agreements should assess whether contracts are at-will; if so, a notice of termination followed by new contracting may be legally safer than unilateral non-compliance with existing terms.

Complex Concepts Simplified

  • Sovereign immunity: A legal doctrine barring suits against the State unless the State consents. Georgia’s 2020 constitutional amendment (Art. I, Sec. II, Par. V) waives immunity for actions seeking declaratory relief from unlawful or unconstitutional acts by the State, and allows injunctive relief only after declaratory relief is awarded.
  • Declaratory relief vs. injunction: A declaratory judgment states the parties’ rights; an injunction orders or prohibits specific actions. Under Paragraph V, injunctions must follow and enforce a declaration.
  • Continuous-performance contract: An agreement requiring ongoing, recurrent performance (e.g., services, access, supply) rather than a one-off delivery or payment.
  • Definite vs. indefinite duration: A definite term has a clear end by time or objective event. An indefinite term lacks a certain end point or makes termination contingent on events that may never occur or on a party’s discretion.
  • Terminable at will: If a continuous-performance contract lacks a definite duration (and no time is fixed by law or usage), either party may end it on notice. The contract remains enforceable while in effect; it is simply subject to termination without cause.
  • Contract Clause: The U.S. Constitution prohibits states from passing laws that substantially impair preexisting contracts without sufficient justification. Where a contract is terminable at will, the extent of impairment is reduced because the counterparty had no guarantee of continuation.
  • Ex contractu waiver (Art. I, Sec. II, Par. IX(c)): A separate Georgia constitutional waiver permitting suits against the State for breach of written contracts. Plaintiffs in Dovetel did not invoke this waiver.

Conclusion

State of Georgia v. Dovetel Communication, LLC delivers two consequential clarifications in Georgia public law and contracts. First, it cements a practical, accessible pathway for constitutional and ultra vires challenges to state action via the declaratory-judgment waiver in Article I, Section II, Paragraph V(b)(1): waiver attaches when plaintiffs seek declaratory relief from allegedly unlawful or unconstitutional acts, without any special pleading talisman. Second, it reinforces a durable default in Georgia contract law: continuous-performance agreements lacking a definite term—especially those that purport to continue “until” the parties later agree otherwise—are of indefinite duration and therefore terminable at will upon notice.

For agencies and contractors alike, the message is direct. If the goal is stability beyond at-will termination, draft for it explicitly with clear terms, objective termination events, and exclusive cause-based termination provisions. For litigants, Paragraph V offers a viable avenue to test the legality of state action, but merits will turn on underlying contract structure and the familiar private-law defaults that Georgia courts continue to apply with rigor. The Court’s split disposition—affirming the waiver, vacating the merits, and remanding—underscores that public contracting disputes in Georgia will increasingly turn on careful drafting and precise alignment between remedies sought and constitutional pathways available.

Case Details

Year: 2025
Court: Supreme Court of Georgia

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