Cyprus: How does the law approach indefinite contracts and trade restrictions?

 

A recent case in the English High Court underscored the significance of clear termination clauses in indefinite contracts and emphasized that implied terms are determined by the specific context of the contract. Furthermore, the court clarified that claims involving the restraint of trade can only succeed if they demonstrate unreasonable restrictions on commercial activity.

Key Takeaways:

In Zaha Hadid Ltd v The Zaha Hadid Foundation [2024] EWHC 3325 (Ch), the High Court addressed issues related to the termination of indefinite contracts and the doctrine of restraint of trade. Zaha Hadid Ltd, representing the legacy of one of the world’s most renowned architects, sought to terminate a perpetual trademark licensing agreement that required them to pay royalties amounting to 6% of net income to the Zaha Hadid Foundation. The company argued for an implied right to terminate the agreement on reasonable notice and claimed the terms constituted an unreasonable restraint of trade.

Court’s Rulings:

• No Implied Term for Termination: The court declined to imply a term allowing termination on reasonable notice, as the contract’s explicit terms did not support such a right.
• No Unreasonable Restraint of Trade: The court found the agreement to be commercially reasonable, reflecting the value derived from the use of the "Zaha Hadid" name.

 

For further information, please contact:

Lara Krayem, Associate

Papadopoulos, Lycourgos & Co LLC, Nicosia

 

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