Perpetuity Agreement

By Fraser Sherman
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A contract with a perpetuity clause can potentially last forever. Some publishers seek to lock up rights to writers' books by asking for the rights "in perpetuity," for instance. Business-to-business agreements rarely use the word "perpetual," but often include clauses with the same effect. Think carefully before signing any contract that locks you in for that long with no escape.

Publishing Pitfalls

Traditionally, publishing contracts let the author regain control of her rights to a book after a set period -- five or 10 years, for example. Some contracts, however, give the publisher the right to publish the book in perpetuity, which is a bad deal for the author. The rights will expire, but only when the copyright on the book does -- which at publication is the author's life plus 70 years. A reversion clause can counteract the use of "in perpertuity" -- for example, a clause that says rights reverts to the author if the book goes out of print.

Time-Share Troubles

Time-share contracts for vacation condos may be for a set period of time, or in perpetuity -- you owe maintenance and other fees forever, unless you manage to sell the unit. Even if the contract says you pay in perpetuity, there may be ways to get out of it. Some resorts have agreed to take back units when owners sued. For example, some owners have sued on grounds of fraud: They only bought the unit because the company made false claims about what a great financial investment it was.

Other Phrasing

There are ways to make a contract perpetual without making it obvious. "Life of copyright" in a publishing contract gives away the rights until copyright expires, the same length as "in perpetuity." A business contract may say it automatically renews, or renews unless both parties agree to cancel it, or that it continues "indefinitely." All of these potentially create a contract that one party can keep going forever.

How to Respond

In some cases, it may be worth signing a contract that includes a perpetuity clause. For example, if a musician gives up rights to a song in perpetuity, but only in one media or a limited geographical area, the contract might be worth it. If one party decides she does want to end a contract, the law may be on her side. Several states such as Texas have legal doctrines that frown on perpetual, never-ending contracts and make it easier to get out of them. The laws in other states, though, are less helpful.

About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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