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Legal Memorandum: Enforceability of a Contract Expired by its Terms

Issue: Is a contract is unenforceable if it expired by its terms?

Area of Law: Business Organizations & Contracts
Keywords: Enforceability of a contract; Expired by its terms
Jurisdiction: Federal, National
Cited Cases: 642 N.Y.S.2d 306; 692 P.2d 776; 607 A.2d 465; 938 So. 2d 114
Cited Statutes: None
Date: 05/01/2007

The law clearly provides that when a contract expires by its terms, it is unenforceable.  Aon Risk Servs. of La., Inc. v. Ryan, 807 So. 2d 1058, 1060, 1062 (La. Ct. App. 2002); Charles Hyman, Inc. v. Olsen Indus., Inc., 642 N.Y.S.2d 306, 307-08 (Sup. Ct. App. Div. 1996); Clark v. Village of Olympia Fields, No. 91 C 4629 (N.D. Ill. Sept. 9, 1992).  See also Chauvin v. Wellcheck, Inc., 938 So. 2d 114, 118 (La. Ct. App. 2006) (once agreement expired by its terms, issue presented in declaratory judgment action was rendered moot).  Accord Rosenmiller v. Bordes, 607 A.2d 465, (Del. Ch. Ct. 1991) (agreement that expired by terms of statute was unenforceable).

The Pennsylvania case of Spectrum Colour Studios v. Woolaghan, 63 Pa. D. & C.2d 346 (Pa. Ct. Com. Pl. 1973), is on point.  The defendant entered into an agreement with the employer (a non-compete agreement), left the employment, and was subsequently rehired by the same employer in a different capacity and under a new employment agreement.  Id. at 347.  He did not, upon being rehired, sign a new non-compete agreement.  Id.  The non-competition agreement was unenforceable on several grounds, one of which was that the agreement, signed in 1971 when the defendant worked for the plaintiff as a part-time proof passer, expired by its terms when the defendant quit in February 1973.  Id. at 348, 351-52.  The non-compete agreement was unenforceable against the defendant as to his work as a salesman […]

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