Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192

Zaha Hadid Ltd appealed against a ruling that its trade mark licence with the Zaha Hadid Foundation, requiring a 6% royalty, was perpetual. The Court of Appeal held the contract was of indefinite duration and terminable by either party on reasonable notice.

Facts

The case concerned a trade mark licence dated 1 May 2013 (signed in 2014) between Dame Zaha Hadid (later succeeded by the Zaha Hadid Foundation) as licensor, and Zaha Hadid Limited (the architecture practice she founded) as licensee. The licence granted the Company a non-exclusive right to use the ZAHA HADID trade marks worldwide in return for a royalty of 6% of net income on all licensed services. Following Dame Zaha’s death on 31 March 2016, the marks passed to the Foundation.

Clause 12 of the agreement provided that it would “continue indefinitely, unless terminated earlier in accordance with this clause 12”. Clauses 12.2 and 12.3 gave the licensor express rights to terminate (on three months’ notice without cause, or immediately for specified defaults). No express termination right was given to the licensee.

The Company, wishing to renegotiate what it considered an excessive royalty, served notice of termination in March 2024. The Foundation disputed the Company’s right to terminate. Adam Johnson J at first instance held the contract contained no right for the Company to terminate and rejected a restraint of trade argument. The Company appealed.

Issues

Two principal issues arose:

1. Whether, on its true construction, the licence agreement could be terminated by the Company on reasonable notice.
2. Whether, if not terminable, the contract constituted an unreasonable restraint of trade and was thereby void.

Arguments

Appellant (the Company)

The Company argued the contract was of indefinite (not perpetual) duration and could be terminated on reasonable notice as a matter of construction. It relied on authorities including Winter Garden Theatre, Martin-Baker Aircraft, Spenborough Corporation and Staffordshire Area Health Authority. Originally it disavowed any reliance on implied terms, but during oral argument adjusted its position to maintain an implied term case in the alternative. On restraint of trade, it argued clause 5.1 (best endeavours) and the 6% royalty on all income unreasonably fettered its business.

Respondent (the Foundation)

The Foundation argued clause 12 conferred termination rights only on the licensor, and the express rights excluded any right of the licensee to terminate. The line of authorities relied upon should be understood as implied term cases, which the Company had disavowed. The contract was commercially sensible given Dame Zaha’s interest in controlling her legacy and receiving income during her lifetime.

Judgment

Sir Colin Birss C (with whom Peter Jackson and Popplewell LJJ agreed) allowed the appeal.

The authorities

The Chancellor reviewed Llanelly Railway, Winter Garden Theatre, Re Berker Sportcraft, Martin-Baker Aircraft, Spenborough, Staffordshire Area Health Authority, and Watford Borough Council. He drew two conclusions. First, the reasoning reflects a two-stage process originating with Lord MacDermott in Winter Garden Theatre: (i) determining as a matter of construction whether the parties intended the agreement to be perpetual or of indefinite duration; (ii) if indefinite, inferring a power for either party to terminate on reasonable notice. Any implied term at the second stage flows directly from the construction at the first. Second, “indefinite” and “perpetual” are not synonyms.

Construction of clause 12

The Chancellor rejected the judge’s view that the wider terms and context suggested only the licensor should have termination rights. The one-sided nature of trade mark licences reflects the legal need for licensors to maintain control to preserve validity, not an intention about termination. The common intention that the Company would become independent of Dame Zaha through equity passing to Mr Schumacher and others militated against perpetuity.

The word “indefinitely” in clause 12.1 was the natural place to find the duration provision; it was not synonymous with “perpetually”. A perpetual construction would produce uncommercial results, tying the Company to promote the marks over centuries despite possible changes in architecture, technology, taste, or reputational events.

Clauses 12.2 and 12.3 were not inconsistent with a right to terminate on reasonable notice. Clause 12.3 concerned immediate termination for default; clause 12.2 allowed termination without cause on three months’ notice, which could be longer or shorter than reasonable notice depending on circumstances. The expressio unius maxim was a factor but not determinative.

The Chancellor held that the contract was of indefinite duration and terminable by either party on reasonable notice. What amounts to reasonable notice depends on circumstances at the time of notice, citing Martin-Baker and Decro-Wall International SA v Practitioners in Marketing Ltd.

Restraint of trade

Given the appeal succeeded on construction, the Chancellor declined to decide the restraint of trade issue, noting only that trade mark licences may be a class of agreement in which apparently restrictive terms form part of the structure of a “trading society” (referring to Peninsula Securities Ltd v Dunnes Stores and Quantum Actuarial), and that such analysis should be left to a case where it matters.

Implications

The judgment confirms and clarifies the two-stage analytical framework for contracts of no fixed express duration. A court first determines, as a matter of construction, whether the parties intended the agreement to be perpetual or indefinite. Only if indefinite does the inference of a power to terminate on reasonable notice arise, which may properly be described either as part of the construction exercise or as an implied term flowing inevitably from it.

The decision reinforces that “indefinitely” should not lightly be equated with “perpetually” and that commercial parties are not readily assumed to have bound themselves irrevocably for all time. The presence of express termination rights for one party does not automatically exclude a right of termination on reasonable notice for the other, unless such a right would be inconsistent with the express provisions.

The judgment is particularly significant for drafters and users of long-term commercial licences, including trade mark licences. It highlights that parties wishing to create perpetual obligations must use clear language to that effect; otherwise, a right to terminate on reasonable notice is likely to be inferred. The reasonableness of notice will be assessed by reference to circumstances at the time of termination.

The court expressly left open the application of the restraint of trade doctrine to trade mark licences, signalling that further analysis in an appropriate case will be needed to determine whether such agreements fall within the “trading society” category that is dispensed from justification.

Verdict: Appeal allowed. The Court of Appeal held that the licence agreement was of indefinite (not perpetual) duration and could be terminated by either party, including the Company, on reasonable notice. The restraint of trade issue was not decided.

Source: Zaha Hadid Ltd v The Zaha Hadid Foundation [2026] EWCA Civ 192