A Contract for Indefinite Duration, or “Indefinite Duration Contract”, is a contract that doesn’t set a time period for the life of the contract. They usually cover agreements that involve the regular, cyclical sale or transfer of goods and services. They often arise simply out of the general business relationship between supplier and buyer.
Contracts of indefinite duration are typically used when the life of the contract cannot be readily estimated, but each party is willing to work with each other over a long period of time. Some examples of indefinite duration contract usage may include:
- Delivery and shipping contracts
- Contracts for the regular supply of mechanical parts
- Contracts for the providing of industrial fuel, animal feed, or other exhaustible resources
- Employment contracts where the number of projects is not specified, or the terms for renewal are undetermined
- Performance contracts, wherein the performer or actor is not given a set number of shows to complete
“Indefinite” duration doesn’t mean that a contract is valid for an unlimited amount of time; it simply means that its duration cannot or has not been determined. Thus, if a contract doesn’t specify its validity period, it is generally valid for a “reasonable amount of time”. This of course will vary according to the nature of the contract and the type of goods or services provided.
For example, for an athlete, an indefinite duration contract might be considered valid so long as the athlete is healthy and of the age and condition that is reasonable for their sport. Thus, it usually depends on each individual agreement as to how a court will interpret its actual duration.
Indefinite duration contracts may sometimes be subject to the Statute of Frauds. This means that the contract must be in writing if it:
- Can’t be completely performed within one year of the agreement, according to the stated contract terms
- Will exist beyond the lifetime of a party that is performing the contract
- Involves transfers of land, or of goods valued at more than $500
- Is meant to pay for another party’s debts
However, it’s always a good idea to put an indefinite duration contract into writing, since there’s a possibility that it might last for a very long period of time. If the parties have questions or disputes in the future, they can refer to the written contract for guidelines on the terms in conflict.
If a contract for indefinite duration is breached, the remedies typically involve a monetary damages award to reimburse the non-breaching party for their losses. Standard defenses may apply to breach of indefinite duration contracts.
However, one aspect that needs to be considered is that of speculative damages. These are damages that may occur in the future, but are difficult to calculate or are improbable. Since indefinite duration contracts have elements of uncertainty as to how long they will last, a court may not allow speculative damages for these cases.
Indefinite duration contracts are often very helpful and can sometimes actually be necessary depending on the parties’ needs. Any legal inquires or disputes over an indefinite duration contract are best handled by an experienced contracts lawyer. A qualified contract attorney in your area can provide you with prompt legal assistance and representation if you need help drafting, reviewing, or filing a claim for an indefinite duration contract.