Bristows’ SnippITs - Under construction: Court of Appeal infers termination rights in Zaha Hadid dispute

This post is the latest in the Bristows’ SnippITs series, which pulls together the key practical takeaways from recent court decisions for the tech sector and beyond.

In January, we reported the judgment from the High Court in which Mr Justice Adam Johnson declined to construe a mutual right to terminate on reasonable notice into a trademark licence agreement with express, but unilateral, termination rights. On 27 February 2026, the Court of Appeal handed down judgment in Zaha Hadid Limited v The Zaha Hadid Foundation [2026] EWCA Civ 192, reversing the High Court’s decision and inferring a mutual right to terminate on reasonable notice as a matter of construction.

Key takeaways

• Courts may find a difference between a perpetual contract (which is intended to run forever in the absence of express termination rights) and an indefinite contract (which is intended to be brought to an end but at an unspecified point in time). The use of either word may be indicative but is not determinative of the nature of the contract, so an explicit reference to the parties’ intentions is key.
   
• The existence of some express rights does not preclude the inference of further rights of the same type where it would not result in a clear contradiction.  While boilerplate “rights cumulative” clauses often deal with this in respect of the same party’s rights, where parties wish to impose unilateral rights only, they need to be clear about denying such rights to the other party.  This is often seen where customers in business critical agreements may grant a right for the supplier to terminate for non-payment, but otherwise expressly exclude all other termination rights at law or in equity.
   
• There remains a very fine distinction between the inference of a term from the construction of express wording (resulting in that inferred term effectively already existing in the contract) and the implication of a term which is not expressly provided for, but that distinction may not be clear. Parties to a dispute should carefully consider the respective tests and may wish to advance their case on both bases.

Appeal decision

Perpetual vs indefinite agreements

On review of the case law, the Court of Appeal adopted the two-stage construction logic from Winter Garden Theatre (London) Limited v Millenium Productions Ltd [1948] AC 173:

1. Did the parties intend the agreement to run in perpetuity or merely indefinitely (i.e. to be terminated at an unspecified time)?

2. (a) A perpetual agreement leaves no room to infer termination rights in the absence of express terms.

(b) Conversely, to effect an intention for the agreement to be indefinite, it necessarily follows that both parties must be able to bring it to an end, i.e. to terminate on reasonable notice.

Assessment of the parties’ intentions

The Court of Appeal considered the agreement as a whole and its commercial context to construe the parties’ intentions, and found nothing to suggest that only the licensor was intended to have termination rights.

• It did not follow from the fact that the wider agreement contained one-sided obligations regarding use of the trade marks that the termination right was also intended to be one-sided. The nature of trade marks as a subject matter means that the licensor had a particular interest in ensuring that the marks were used appropriately and throughout the territory to protect their value as an IP asset.
   
• It was common ground that the late Dame Zaha Hadid had intended to give others equity in the Company such that it would become independent. This was an indicator against the intention to create a perpetual licence: it was not far-fetched to imagine that the independent group might eventually wish to stop using Dame Zaha’s name.
   
• What constitutes ‘reasonable notice’ may vary over time. The fact that it was now agreed that a period of 12 months constituted reasonable notice did not mean that the construction depended on the same notice period being reasonable when the contract was signed, i.e. during Dame Zaha’s lifetime.

Interplay with other express termination rights

Perhaps most surprisingly, the Court found that the inference of a mutual right to terminate on reasonable notice did not contradict the other express termination rights, including the licensor’s unilateral right to terminate on three months’ notice. The inference of the additional right to terminate on notice – applicable to both licensor and the Company - means that the licensor effectively has two identical rights, save that it has the choice of three months’ or ‘reasonable’ notice. The Court remarked that three months might be less or more than reasonable at any given time, and held that the inclusion of certain express rights to terminate on notice, whilst a factor for consideration, was not determinative of the (non)-existence of further rights of the same type.

Construction vs implication

In the first instance trial, the Company had unsuccessfully run its case solely on the basis that the mutual termination right was construed from the express contractual language without need for an implied term. During the appeal proceedings the Company adjusted its case to maintain an argument based on an implied termination right should the Court view it as such. The Court of Appeal ultimately accepted that the Winter Garden Theatre logic fell within the exercise of construction, but acknowledged that the second stage could be seen as an implied term following from the true construction of the agreement.