Zaha Hadid Ltd v The Zaha Hadid Foundation

Factual and Procedural Background

This appeal concerns a trade mark licence between Company A (the Appellant), an international architecture practice founded by Person A, and Company B (the Respondent), an entity established by Person A to preserve her work. The licence (dated 1 May 2013, signed 2014) granted Company A use of the trade marks worldwide in return for a 6% royalty on "Net Income". Person A held the marks originally; after her death on 31 March 2016 the marks passed to Company B, which became the licensor. Company A seeks to continue using the trade marks but to renegotiate or terminate the licence, asserting a right to terminate on reasonable notice; Company B disputes that right. At trial (November 2024) Judge Johnson held there was no term allowing Company A to terminate on reasonable notice and rejected a restraint of trade challenge. Permission to appeal was given by Judge Falk. Company A had given 12 months' notice in March 2024; Company A has since continued to use the marks and to pay royalties in accordance with Judge Johnson's decision.

Legal Issues Presented

1. Whether, on construction of clause 12 of the licence, the licensee (Company A) has a right to terminate the agreement on reasonable notice.
2. If no such right exists, whether the contract operates as an unreasonable restraint of trade and is void.

Arguments of the Parties

Appellant's Arguments

• Construction: Clause 12.1 ("continue indefinitely") should be read as an agreement of indefinite duration (not perpetual) and therefore subject to termination by either party on reasonable notice; this was advanced as a construction point rather than an implied-term claim (though the Appellant accepted, by leave, that an implied-term analysis could be advanced if the court treated the submission as such).
• Cited authorities (e.g. Winter Garden Theatre, Martin-Baker, Spenborough, Staffordshire Area) support that where a contract is of indefinite duration and not perpetual a right to terminate on reasonable notice may be inferred as part of construction.
• Commercial sense: construing the contract as perpetual and binding Company A forever is commercially implausible.

Respondent's Arguments

• The express terms of clause 12 show only rights of termination exercisable by the licensor (Company B); there is no right for the licensee to terminate on notice.
• The authorities relied on by the Appellant should be distinguished or are concerned with implication of terms; modern authorities (e.g. Marks & Spencer, Tesco) show a stringent approach to implying terms.
• On restraint of trade, Company B relied on authorities and procedural points: certain submissions (e.g. clause 5.1) were not pleaded or lacked evidence, correspondence undermined Company A's present complaint, and relief sought could conflict with severance principles (Tillman).
• Factual/contextual points: the agreement was intended to provide income for Person A and to preserve the Company's trading under the name indefinitely; these matters form part of the factual matrix supporting Company B's construction.

Table of Precedents Cited

Court's Reasoning and Analysis

The court (Judge Birss) applied established principles of contractual construction (objective meaning, consideration of the contract as a whole and relevant background, and an iterative process) drawn from Wood and Sara & Hossien. The court reviewed the historical authorities on contracts of indefinite duration (including Winter Garden, Martin-Baker, Spenborough, Staffordshire and others) and extracted a two-step analytical framework: (1) determine as a matter of construction whether the parties intended the agreement to be perpetual or of indefinite duration; (2) if the agreement is indefinite (not perpetual), a right to terminate on reasonable notice follows as part of the parties' intentions and thus forms part of the contract (which may be characterised as an implied term that follows from construction).

Applying that framework to clause 12.1, the court noted the clause uses the word "indefinitely" (not "perpetually") and found nothing in the wider contract or factual matrix that required an inference that only the licensor would have termination powers. The express licensor rights in clauses 12.2 and 12.3 did not exclude a licensee's right to terminate on reasonable notice and were not inconsistent with a mutually available right to terminate: clause 12.3 addresses immediate termination for material default, and clause 12.2 gives the licensor a specific power to terminate on three months' notice, neither of which precludes the licensee's reasonable-notice right. Contextual factors (including the commercial nature of trade mark licences and the expectation that the Company would become independent over time) supported construing the agreement as indefinite rather than perpetual. The court therefore inferred the right to terminate on reasonable notice and allowed the appeal. The court declined to decide the restraint of trade grounds as unnecessary to the outcome, noting the restraint analysis raised broader issues (including the relevance of trading-society considerations) better left to cases where the point matters.

Holding and Implications

APPEAL ALLOWED. The court held that the licence is properly construed as an agreement of indefinite duration and that, as part of that construction, the licensee has a right to terminate the agreement on reasonable notice.

Implications: Direct effect is that Company A (the Appellant/licensee) may terminate the licence on reasonable notice; the court did not resolve the restraint of trade challenge and declined to set broader precedent on that topic here. No broader restraint ruling was made, and the decision turns on construction of the contract before the court.