Opinion ID: 1320335
Heading Depth: 1
Heading Rank: 4

Heading: Perpetual Right of Renewal

Text: Alert asserts that as a matter of law, the contract cannot confer upon CCN a unilateral perpetual right of renewal. Alert argues that since there is by law no perpetual right of renewal, the contract was terminable at will, therefore, reasonable notice of termination was all that was required to relieve Alert from any contractual obligation. Historically, perpetual contracts have not been favored in South Carolina and are generally upheld only where the perpetual nature of the agreement is an express term of the contract. See Childs v. City of Columbia, 87 S.C. 566, 70 S.E. 296 (1911). In Childs, the contract at issue was completely devoid of any term of duration and we were forced to interpret the contract absent any evidence of the parties' intentions. Id. The parties all seem to concede that Childs is the governing law, and CCN acknowledges in their complaint that the contract term between CCN and Alert did not provide for a specific duration. In Childs, we held that: [w]here the parties to a contract express no period for its duration, and no definite time can be implied from the nature of the contract or from the circumstances surrounding them, it would be unreasonable to impute to the parties an intention to make a contract binding themselves perpetually. In such a case the courts hold with practical unanimity that the only reasonable intention that can be imputed to the parties is that the contract may be terminated by either, on giving reasonable notice of his intention to the other. Id. at 572, 70 S.E. at 298. Here, as in Childs, the fatal defect of the complaint is that it alleges a contract term lacking specific duration. The original 1985 contract provides in relevant part that: 9) [The] period covered by this agreement is one year with the right of renewal by Carolina Cable Network at its expiration. 10) Alert, Inc. reserves the right to cancel this agreement with fifteen days notice under the following conditions: a) Payment has not been made to Alert for use of its system within 60 days from the date of the original invoice. b) Carolina Cable Network through its operation misuses either the equipment or office space made available by Alert. Alert argues that this seemingly perpetual right of renewal is sufficient to make the terms of the agreement ambiguous and, therefore, terminable at will. This assertion is correct. Plainly, the contract attempts to confer on CCN the indefinite right of renewal, and in light of the clear precedent of Childs, supra, this contract can only be construed as terminable at will. Where the contract is terminable at will, reasonable notice from either party is all that is required to terminate the agreement. Childs, supra .