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Message: <blockquote data-quote="S'mon" data-source="post: 8883939" data-attributes="member: 463">Despite searching, I've not been able to find a clear US case on this. Indeed instead I've actually found US sources referencing the UK case I did find - BMS v AB Agri (2010). This decision seems well within mainstream jurisprudence. It says that the meaning of Perpetual depends on the context, and that Perpetual does not always mean irrevocable. I can see why this would encourage people to put Irrevocable in their contract drafts.Here's the abstract I got from Westlaw:BMS Computer Solutions Ltd v AB Agri LtdNo Substantial Judicial TreatmentCourtChancery DivisionJudgment Date10 March 2010Where Reported[2010] EWHC 464 (Ch)[2010] 3 WLUK 294JudgmentSubjectContractsOther related subjectsInformation technologyKeywordsLicensing agreements; Technical support; Termination; VariationJudgeSales JCounselFor the applicant: Vernon Flynn QC, Jonathan Hill.For the respondent: Neil Kitchener QC, Philip Roberts.SolicitorFor the applicant: Greene & Greene (Bury St Edmunds).For the respondent: Addleshaw Goddard.Case DigestSummaryA variation to a software licensing agreement to make it perpetual rather than of limited duration extended the original agreementrather than superseded it. The termination provisions in the original agreement had not been expressly deleted and they continuedto have effect.AbstractThe applicant computer software business (B) applied for summary judgment on two points in a claim it had brought againstthe respondent licensee of its software (L).B had entered into a licence agreement licensing a predecessor company of L to use a software package for its animal feedmill. The licence agreement included provisions as to its termination and stated that it would expire after 10 years unless it wasterminated earlier. On the same date, the parties entered into a technical support agreement, which also contained provisions asto its termination. The licence agreement required the support agreement to be kept in place, otherwise the licence agreementwould terminate. By a variation agreement some years later, the licence and support agreements were novated to take effectas licence and support agreements between B and L. The variation agreement stated that the licence would be extended tobe a "perpetual licence usable ... at all [L's] operations ... up to a maximum aggregate annual tonnage". It further providedfor payments to be made in respect of tonnage above the maximum, and that new licence and support agreements were to benegotiated for all non-organic tonnage growth. L gave notice to terminate the support agreement as it was developing its ownsoftware, but it asserted that its licence to use B's software continued, contrary to B's contention that continuation of the licencewas conditional on the support agreement continuing. L had also used the software at an additional mill without negotiatingnew licence and support agreements. The annual tonnage of compound feed of L's operations remained less than the maximum.B made its application on the issues of (i) whether, on the construction of the three agreements, the licence had been terminated,notwithstanding its description in the variation agreement as "perpetual"; (ii) whether L was required to obtain a further licencein respect of the additional mill.HeldApplication granted.(1) The licence had been terminated. "Perpetual" had different shades of meaning, including "incapable of being brought to anend" and "of indefinite duration, but subject to any contractual provisions governing termination". The latter interpretation of"perpetual" in the variation agreement was correct. There was therefore no incompatibility between the variation agreementand the requirement to keep the support agreement in place, so that requirement continued to have effect. Therefore, when Lterminated the support agreement, it also terminated the licence. The variation agreement had plainly not been intended whollyto displace the licence agreement: it stated that the licence would be extended rather than replaced. That indicated that thelicence referred to in the variation agreement was subject to the same termination provisions as in the licence agreement. Thefact that the variation agreement did not refer to the termination provisions in the licence and support agreements indicated thatthose provisions were intended to continue in force. Further, the termination provisions were very important terms: if the partieshad intended to delete them, they would have referred to them in terms to make that intention clear rather than leaving it to beinferred from the use of "perpetual", a term of uncertain meaning. There was also a clear commercial need for the terminationprovisions to continue to operate since otherwise there would be no mechanism to bring potentially onerous obligations underthe agreement to end. (2) Use of the software to produce feed above the maximum tonnage was clearly contemplated as beingauthorised under the variation agreement, since it had made provision for the additional payments. The maximum tonnage figuredid not therefore provide a limit on the extent of the licence granted by B when L's business grew or was added to. It wouldnot be commercially realistic to suppose that the parties intended that there should be no protection for B if L expanded itsactivities. It was possible and necessary to interpret the variation agreement by giving it its ordinary and natural meaning so asto require new licence and support agreements to be negotiated for all non-organic tonnage growth.BMS Computer Solutions Ltd v AB Agri Ltd, 2010 WL 783753 (2010)© 2023 Thomson Reuters. 2</blockquote>

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