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Implied Definite Term of Duration

The Second Department explained the analytical criteria for determining the duration of a contract with no express definite term of duration. If there is no definite term of duration, the contract is terminable at will.  However, a definite term of duration need not be express (it can be implied from the surrounding circumstances):

Contracts containing no definite term of duration are terminable at will … . A definite term of duration need not be relayed in express terms, and may be implied … , and “where a duration may be fairly and reasonably supplied by implication, a contract is not terminable at will … . “In the absence of an express term fixing the duration of a contract, the courts may inquire into the intent of the parties and supply the missing term if a duration may be fairly and reasonably fixed by the surrounding circumstances and the parties’ intent” … .

Here, the Supreme Court correctly determined that, by fair implication, the duration of the parties’ agreements was dependent upon the continued sale of the products designated in the subject agreements and, thus, the agreements could be terminated only upon [defendant’s] discontinuation of the sale of the designated products. Bennett v Atomic Prods. Corp., 2015 NY Slip Op 07806, 2nd Dept 10-28-15

 

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