City of Shelbyville v, Bedford County

This appeal requires us to determine whether a contract—silent as to duration—was terminable at will or after a reasonable time, and whether the trial court properly set a termination date. In 1974, Appellant Bedford County and Appellee City of Shelbyville entered into a contract, under which Appellee agreed to pay Appellant a portion of its sales tax revenue. The purpose of the contract was to effectuate the building and maintenance of County schools as described in a separate “Building Program B,” which was completed in 1999. The parties’ contract contained no termination date, and the parties dispute whether certain requirements set out therein constitute conditions precedent to termination. After the City notified the County of its intent to terminate the contract, the City filed this declaratory judgment action. The trial court held that the requirements set out in the contract did not address termination. In the absence of a termination date or event, the trial court held that the contract was terminable within a reasonable time or at will upon reasonable notice. The trial court set the termination date as July 1, 2027. The County appeals. Discerning no error, we affirm.