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Legal Memorandum: Enforceability of Contracts Expired by Terms

Issue: May a party seek to enforce the terms of a dispute resolution agreement that has expired by its own terms?

Area of Law: Alternative Dispute Resolution
Keywords: Dispute resolution agreement; Expired by its terms
Jurisdiction: Virgin Islands
Cited Cases: 642 N.Y.S.2d 306; 692 P.2d 776; 501 U.S. 190; 607 A.2d 465; 938 So. 2d 114
Cited Statutes: None
Date: 11/01/2007

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 Carlton-Michaels Corp. v. PAX Holdings, Inc., No. Civ.1997-55 (D.V.I. Jan. 16, 2001) (concluding that, given that the option agreement had expired, the plaintiff was not entitled to damages for breach of contract).  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); Chiang v. Turnbull, No. 74/2000 (V.I. Terr. Ct. June 20, 2000) (given that exclusivity agreement had expired by its terms, the plaintiffs did not state a justiciable claim relative to engaging in exclusive negotiations).  Accord Rosenmiller v. Bordes, 607 A.2d 465 (Del. Ch. Ct. 1991) (agreement that expired by terms of statute was unenforceable).

The United States Supreme Court dealt with this issue as it related to an arbitration clause in a collective bargaining agreement in Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (1991).  In Litton, the Court held that while claims that arise under a contract may be subject to the terms of the contract even after the contract expires, claims that arise after the […]

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