Printable Format84-2-309. Absence of specific time provisions; notice of termination. (1) The time for shipment or delivery or any other action under a contract if not provided in this article or agreed upon shall be a reasonable time.
(2) Where the contract provides for successive performances but is indefinite in duration it is valid for a reasonable time but unless otherwise agreed may be terminated at any time by either party.
(3) Termination of a contract by one party except on the happening of an agreed event requires that reasonable notification be received by the other party and an agreement dispensing with notification is invalid if its operation would be unconscionable.
History: L. 1965, ch. 564, ยง 43; January 1, 1966.
KANSAS COMMENT, 1996
1. Subsection (1) of this section, together with the two immediately preceding sections, fills in the terms of delivery when the parties have left them open. It provides that the time for delivery or shipment, when the contract is silent, is a reasonable time. For the Code definition of "reasonable time," see 84-1-204.
2. In long-term contracts, the parties often do not specify the date of termination. Under subsection (2), a contract that provides for successive performances but is indefinite in term is valid for a reasonable time but may be terminated by either party on reasonable notice. See Panhandle Agri-Service, Inc. v. Becker, 231 K. 291, 644 P.2d 413 (1982) (contract to supply fixed quantity of hay not for successive performances).
3. When a contract specifies that it terminates on the happening of an agreed event, such as "at the end of the war," no notice of termination is required. In all other cases notice is required, and under subsection (3) an agreement to dispense with notice is invalid if in operation it is unconscionable. Termination clauses may not be exercised in bad faith. See Baker v. Ratzlaff, 1 K.A.2d 285, 564 P.2d 153 (1977) (contract not expressly terminable at will). Compare Morris v. Coleman Co., 241 K. 501, 738 P.2d 841 (1987) (no implied covenant of good faith and fair dealing in employment -at-will contract). Note that "termination" refers to the power created by agreement to end the contract. It should be distinguished from "cancellation," which occurs when either party ends the contract for breach by the other. See 84-2-106.
Law Review and Bar Journal References:
Contract law under the U.C.C. is substantially the same as prior Kansas law, Laurence A. Stanton, 10 W.L.J. 327, 330, 332 (1971).
CASE ANNOTATIONS
1. Contract for sale of hay held not indefinite in duration. Panhandle Agri-Service, Inc. v. Becker, 231 Kan. 291, 294, 644 P.2d 413 (1982).
2. Where conduct creates implied-in-fact contract between distributor and manufacturer, it was terminable at-will upon reasonable notice. Circo v. Spanish Gardens Food Mgf. Co., Inc., 643 F. Supp. 51, 54 (1985).
3. Gap-filler statutes, under New York law, as unuseable where parol evidence admissible to establish missing terms examined. Rajala v. Allied Corp., 66 B.R. 582, 594 (1986).
4. Section requires reasonable time action when contract is silent. Inter-Americas Ins. Corp. v. Imaging Solutions Co., 39 Kan. App. 2d 875, 883, 885, 185 P.3d 963 (2008).