This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The nature of the subject-matter and the surrounding circumstances may, however, show that the parties intend such contract to be a permanent obligation, or at least they intend that it shall last for a longer period than that at which one of the parties has attempted to terminate.1 In such cases it is frequently said that the contract is permanent;2 but such statement is ordinarily, in part at least, obiter, since the question which is involved is usually whether such contract is not to extend beyond the time at which one of the parties has attempted to terminate it. A contract by which a water company agrees to furnish water in consideration of an easement for its pipes across the land of another, has been said to be permanent,3 so that it can not be terminated after a reasonable time and upon reasonable notice.4 In this case, however, the question involved was whether the assignee of the water company could terminate such contract after twenty-five years, while retaining its right to place its pipes across the land of the adversary party; and it was held that while such rights were indefinite and unlimited as to time, they were not necessarily perpetual; that the water company could change its line of pipes and could avoid liability under the original contract; but that while it enjoyed such easement, it must pay therefor in the manner fixed by the original contract.5 A contract between a railway company and a telegraph company, by which the telegraph company acquires a license to erect poles on the land of the railway company, and both railway company and telegraph company are to be entitled to string wires along such poles, is said to be permanent.6 A contract by which A, a telegraph company, gives to B, a license to string wires on A's poles, which wires are to become A's property after ten years, and A is then to lease to B at a certain sum per annum, has been held to be a permanent contract if in performance thereof B has expended a large sum of money in stringing such wires and has given up a valuable contract with a rival telegraph company for similar services.7 A contract between the owners of adjoining buildings for the construction and operation of an elevator for the service of both buildings, has been said to be permanent.8 Such a contract by its express provision was to operate "so long as the buildings shall remain," and the question in the case was as to the right of a purchaser of one of the buildings to refuse to continue paying for the expense of operating the elevator after a change in the business conditions had made it unprofitable to employ an elevator in such building.9
10 See ch. XCV.
1 Franklin Telegraph Co. v. Harrison, 145 U. S. 459, 36 L. ed. 776; Mississippi River Logging Co. v. Robson, 69 Fed. 773,16 C. C. A. 400 [same case, 43 Fed. 364]; Western Union Telegraph Co. v. Pennsylvania Co., 129 Fed. 849, 68 L. R. A. 968; Southern Pacific Co. v. Spring Valley Water Co., 173 Cal. 291, L. R. A. 1917E, 680, 159 Pac. 865; St. Barnabas Hospital v. Minneapolis International Electric Co., 68 Minn. 254, 40 L. R. A. 388, 70 N. W. 1126; Globe Ins. Co. v. Wayne, 75 O. S. 451, 80 N. E. 13.
2 Franklin Telegraph Co. v. Harrison, 145 U. S. 459, 36 L. ed. 776; Western
Union Telegraph Co. v. Pennsylvania Co., 129 Fed. 849, 68 L. R. A. 968; Southern Pacific Co. v. Spring Valley Water Co., 173 Cal. 291, L. R. A. 1917E, 680, 159 Pac. 865; Globe Ins. Co. v. Wayne, 75 O. S. 451, 80 N. E. 13.
3 Southern Pacific Co. v. Spring Valley Water Co., 173 Cal. 291, L. R. A. 1917E, 680, 159 Pac. 865.
4 Southern Pacific Co. v. Spring Valley Water Co., 173 Cal. 291, L. R. A. 1917 E, 680, 159 Pac. 865.
5 Southern Pacific Co. v. Spring Valley Water Co., 173 Cal. 291, L. R. A. 1917 E. 680, 159 Pac. 865.