Businesses sometimes enter long-term contracts without specifying an end date. But does that mean either party can simply bring the arrangement to an end by giving reasonable notice?

A recent Queensland Court of Appeal decision shows why businesses should not make that assumption.

In Impact Healthcare Pty Ltd v St Vincent’s Private Hospitals Ltd [2026] QCA 21, the Court found that a right to terminate on reasonable notice will not necessarily be implied simply because a commercial agreement has no fixed end date.

What happened?

The dispute concerned a detailed, professionally drafted agreement for the operation of a private hospital emergency centre.

The agreement had no fixed end date and contained a number of specific termination provisions. Importantly, it expressly allowed the service provider, Impact Healthcare, to terminate the agreement for any reason by giving at least six months’ notice.

The hospital had no equivalent general right to terminate without cause.

The hospital argued that, despite the absence of an express provision, it had an implied right to terminate the agreement by giving reasonable notice.

The Queensland Supreme Court initially accepted that argument. However, on appeal, the Queensland Court of Appeal reached the opposite conclusion.

No automatic right to terminate

The Court of Appeal rejected the proposition that commercial contracts of indefinite duration form a recognised category of contracts into which a right to terminate on reasonable notice should automatically be implied.

Instead, whether such a right exists depends on the particular contract, its terms and circumstances, and the established legal principles governing the implication of contractual terms.

In other words, an agreement having no specified end date does not, by itself, give either party a right to terminate it on reasonable notice.

Could a termination right be implied into this particular contract?

The Court also considered whether a right for the hospital to terminate on reasonable notice could be implied into the agreement as a matter of fact.

For a term to be implied in fact into a formal contract, it must satisfy established requirements. Among other things, the proposed term must be necessary to give the contract business efficacy, be so obvious that it goes without saying, be capable of clear expression and not contradict an express term of the contract.

The Court found that those requirements were not satisfied.

The agreement was capable of operating without giving the hospital a general right to terminate on reasonable notice. Such a right was also not so obvious that it went without saying.

Importantly, the contract already contained detailed termination provisions, including an express right allowing Impact Healthcare to terminate for any reason on six months’ notice. Implying a similar general termination right in favour of the hospital would not have been consistent with the way the parties had expressly allocated their termination rights.

The Court therefore held that the hospital did not have an implied right to terminate the agreement on reasonable notice.

The hospital subsequently sought special leave to appeal to the High Court of Australia. On 11 June 2026, the High Court refused special leave, leaving the Court of Appeal decision in place.

What does this mean for businesses?

The decision is an important reminder not to assume that a contract without an expiry date can simply be ended by giving “reasonable notice”.

When entering into or reviewing a long-term agreement, businesses should consider:

  • whether the contract has a fixed term or continues indefinitely;
  • whether it contains an express right to terminate without cause;
  • whether termination rights are available to both parties or only one;
  • what notice must be given and what process must be followed;
  • whether termination payments, handover requirements or other transition obligations apply;
  • what rights exist if the other party breaches the agreement; and
  • whether other laws, including the unfair contract terms regime, may affect the enforceability of particular provisions.

The safest approach is to deal with termination expressly when the contract is negotiated, rather than leaving the parties to argue later about whether a termination right should be implied.

Review before you sign – or terminate

A long-running commercial arrangement can become difficult and expensive to exit if the contract does not clearly deal with how and when it can be brought to an end.

If your business is entering into, reviewing or seeking to exit an agreement with no fixed end date, our team can help you understand the termination provisions, identify your rights and obligations, and assess the commercial risks before you take action.

Yuanchao Chen
Lawyer