Opinion ID: 895256
Heading Depth: 2
Heading Rank: 2

Heading: At-will termination of perpetual contracts

Text: The Authority contends, in the alternative, that the lower court's judgments should be affirmed because the law disfavors perpetual contracts. It is true, as the Authority observes, that the Agreements contain no time limit on its alleged duty to include reimbursement measures in every bond election. We also acknowledge the prospect that voters may never approve such a measure. In Fort Worth Independent School District v. City of Fort Worth, 22 S.W.3d at 841, we noted that contracts which contemplate continuing performance (or successive performances) and which are indefinite in duration can be terminated at the will of either party (quotations omitted). Yet the Authority ignores the line of cases that distinguish between contracts of indefinite duration and contracts that specify determinable events. See generally Trient Partners I Ltd. v. Blockbuster Entertainment Corp., 83 F.3d 704 (5th Cir.1996) (applying Texas law); City of Big Spring v. Bd. of Control, 404 S.W.2d 810 (Tex.1966). Where a contract's language specifies a fixed and determinable term, the rule of law that a contract may be terminated at the end of a reasonable time does not apply. ( Big Spring, 404 S.W.2d at 816). In City of Big Spring v. Board of Control, the City contracted to provide water to a state-run hospital at a pre-arranged rate for as long as the State of Texas shall in good faith maintain and operate said hospital. Big Spring, 404 S.W.2d at 815. Because this language fix[ed] an ascertainable fact or event, by which the terms of [the] contract's duration [could] be determined, we held that the contract was not indefinite in duration and therefore not terminable at will. Id.; see also Fluorine on Call, Ltd. v. Fluorogas Ltd., 380 F.3d 849, 856 (5th Cir.2004) (applying Texas law). The Agreements here stipulate that both lease of the facilities and the terms of the Agreements themselves terminate upon the Authority's purchase of the facilities (having attained voter-approved bond funds). Purchase of the Facilities is an ascertainable event which both parties can identify; the Agreements are thus not terminable at will. [10]