How do we avoid being locked into a perpetual contract?

In a 50/50 arrangement, control-of-rights clauses can also trigger fiduciary duties, meaning each party may owe heightened duties of loyalty and fairness to the other. If one party holds long-term or indefinite control over shared rights, disputes over those duties can become more likely.

Being locked into a deal that never ends can cause problems down the road. You could be stuck with terms that no longer make sense, lose bargaining power, or limit your ability to adapt as your business grows or the market changes.

A contract with a set term and renewal options gives you more control. It allows for:

• Flexibility: You can revisit the deal every few years to make sure it's still fair.
• Negotiation leverage: When a term ends, you have a natural chance to renegotiate key points — like control of rights or financial terms.
• Risk management: A clear end date means you're not trapped in an arrangement that no longer works for your business.

If you'd rather avoid a perpetual setup, think about including:

• A clear initial term (such as 1, 3, or 5 years).
• Renewal options (automatic with opt-out, or requiring both sides to agree).
• Notice periods so each party knows how and when to give non-renewal notice.
• Re-evaluation triggers tied to term endings, which naturally open the door to new discussions.

Adding these protections helps keep partnerships healthy while giving both sides room to adjust over time.

What to consider in your specific situation

While these guidelines work for many deals, your situation may be different depending on the specifics of the contract and the relationship. Factors that could affect your decision include:

• The exact wording of the control or rights clauses in the agreement.
• The structure of the partnership and how decisions are shared.
• Applicable local, state, or federal contract laws.
• How much financial or operational risk your business takes on in the deal.
• Any previous agreements, negotiations, or amendments with this partner.
• The long-term impact on your business if rights stay indefinitely with the other party.

Because every situation is different, it can help to get information specific to your business. You can ask your own question in Rocket Copilot to explore how term limits and renewals usually work, or connect with a Legal Pro to learn more.