Indefinite Duration of Exclusive Distribution Contract
In Long Beach Drug Co. v. United Drug Co. (1939) 13 Cal. 2d 158 [88 P.2d 698], the Supreme Court upheld an express but indefinite term of duration, tied to the performance of the parties, in a contract for the exclusive distribution of Rexall drug products:
"While the agreement here does not state a definite term, it is not wholly silent with respect to its duration.
It provides that the exclusive selling right of plaintiff is to endure so long as plaintiff 'shall perform the terms of this agreement'; that is, so long as plaintiff shall . . . 'uphold all of the products' of defendant to the full list retail prices, confining the sale thereof to its 'own retail store and to consumers only'.
Provisions such as this for the duration of an agreement are sufficiently certain and have frequently been declared valid." (Id. at p. 165.)
Almost 20 years later, a Court of Appeal, citing these two Supreme Court cases, concluded, "The general California rule appears to be that a contract is not fatally defective merely because it does not specify a time presently definite for its termination.
The rule is that if the contract is to remain in effect so long as one continues to perform or act in a certain manner . . . the agreement is sufficiently certain to be vital." (Zimco Restaurants v. Bartenders Union (1958) 165 Cal. App. 2d 235, 237-238 [331 P.2d 789].)