On September 29, 2025, Justice Patel of the New York County Commercial Division issued a decision in Hound Partners, LLC v. Tiger Mgt. L.L.C., 2025 NY Slip Op. 33696(U), holding that a contract without a fixed termination date nonetheless was not terminable at will, explaining:
The issue before the Court is whether the parties’ agreement is terminable at will or whether it establishes a definite duration tied to the continuation of Hound’s business. It is well settled that contracts containing no definite term of duration are generally terminable at will. Unless the agreement expressly provides for perpetual performance, the law will not imply that a contract calling for continuing performance is perpetual in duration. In the absence of an express duration, courts may examine the intent of the parties and, where appropriate, supply a reasonable term based on the surrounding circumstances.
At the same time, the mere fact that an obligation under a contract may continue for a very long time is no reason in itself for declaring the contract to exist in perpetuity or for giving it a construction which would do violence to the expressed intent of the parties. Nor does the fact that the business has prospered far beyond anticipations provide any basis for altering the agreement the parties originally made. The Court of Appeals’ decision in Ehrenworth v. George F. Stuhmer & Co. (229 N.Y. 210 1920) illustrates this principle. There, the parties entered into an exclusive agreement to manufacture and sell bread at a fixed price for as long as both parties remained in business. The defendant argued that the contract was indefinite and revocable at will. The Court rejected that contention, holding that the contract remained enforceable while the parties remained in business and would terminate when the plaintiff ceased carrying on his business. As the Court explained: it is claimed that the contract might be interminable because under its terms it was to last as long as the plaintiff and defendant were in business, but this might well be less than a man’s lifetime, and this court has had no difficulty in approving contracts made to last through the life of one of the parties.
Similarly, in Warner-Lambert, 178 F.Supp at 661, the plaintiff sought to escape its obligation to pay royalties on each gross of Listerine sold, decades after acquiring the formula from the defendant. The court rejected plaintiff’s attempt to characterize the agreement as perpetual, holding instead that the contract was plain and unambiguous: “The obligation to pay on each and every gross of Listerine continues as long as this preparation is manufactured or sold by the plaintiff and his successors. It comes to an end when they cease to manufacture or sell the preparation. There is nothing which compels the plaintiff to continue such manufacture and sale. No doubt the plaintiff and his successors have been and still are free at any time, in good faith and in the exercise of sound business discretion, to stop manufacturing and selling Listerine. The plain meaning of the language used in these agreements is simply that the plaintiff’s] obligation to pay is co-extensive with manufacture or sale of Listerine by him and his successors.
These authorities make clear that, while some contracts lacking a termination date may be deemed terminable within a reasonable time or revocable at will, that is not the case here. The Amended Agreement expressly contemplates that the relationship will continue until such time as Hound ceases doing business. Contrary to Hound’s contention, such a provision sets forth a definite duration.
An agreement expressed in clear and unambiguous language must be enforced according to its terms. Courts are required to read the contract as a whole, avoiding undue emphasis on isolated words or phrases, and must not distort its meaning so as to create a new contract between the parties.
Here, Hound has failed to establish that the Amended Agreement was terminable at will. The contract provides a definite duration: it remains in effect so long as Hound continues to operate its business. By its express terms, the Amended Agreement remains valid and binding during that period.
(Internal quotations and citations omitted).