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UKSolicitorJA, Solicitor
Category: UK Employment Law
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Experience:  solicitor
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I have a franchise agreement that expired 30.10.11, it was

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I have a franchise agreement that expired 30.10.11, it was not renewed but we have continued to trade on same terms - the contract has a clause that states "Where there are references in this Agreement to “terminate” or “termination” such words shall where the context admits be deemed to include the determination or termination of this Agreement for any cause including the termination of this Agreement by effluxion of time where the Franchisee has not entered into a New Agreement under clause 4 hereof"

I am now ceasing the relationship and the Franchisor is saying "In accordance with the contract that prevails – recent case law confirms that the original contract will bind the parties notwithstanding its apparent expiry"

Is this correct?

Yes, normally the original contract is deemed to continue if the parties continue as if the contract had not expired even though it had, but the clause that you point out is very clear that the contract will have terminated where a new contract has not been entered into.

The courts would have the final say over this, the franchisor and us lawyers can only give our opinion.

Even if the contract has expressly ended, the court may say that there was an implied contract between you and the franchisor and that the terms of such implied contract were the same as the express contract which you had entered into.

I would therefore agree with the franchisor I am afraid.

Hope this helps-please leave feedback
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