How to quantify compensation in a contract of indefinite duration?




Permanent contracts can be solved unilaterally but may be entitled to compensation by the principle of good faith


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 Determine damages caused by the unilateral withdrawal of one of the parties to a contract of indefinite duration, It is a complex issue.

The Civil Chamber of the Supreme Court in its judgment of 16 October 2019 (Res. n.º 544/2019) following the same line of doctrine that followed in its Resolution No. 672/2016, He dismissed the two appeals, on the one hand an extraordinary appeal for procedural infringement and other cassation. Both dealt with on a breach of contract of indefinite duration and criteria used to quantify compensation by resolution of the same.


The Royal Automobile Club Valencia (RACV) force had a contract with the Royal Automobile Club of Spain (RACE). RACE breached the contract causing damage to the RACV quantified 334.980 euros as part of annual compensation, that in response to one of the clauses of the contract signed 23 December 2003 It must be met for a period of 20 years old. The total was 4.019.760 euros. Also in demand affecting other requests partners and to the closure of one of the offices included.

RACE asked his acquittal by recklessness and bad faith of the plaintiff. In addition counterclaim he filed requesting the resolution of the contract for breach of the RACV. Alternatively he requested that the contract be resolved by supervening impossibility changed circumstances, which was resolved by unilateral will of the RACE own with effects 1 August 2011, and ultimately, resolution with effect from the date of one's counterclaim.

Primera Instancia

The 24 June 2013 the Court of First Instance and Instruction No. 2 Valencia gave judgment estimating the lawsuit filed by the RACV. The counterclaim was estimated in part by deciding that the contract had been resolved by unilateral will of the RACE and forcing it to comply with the obligation to pay 334.980 euros annually plus interest to date 23 December 2023.

provincial Court

The 30 May 2017, the sixth section of the Audiencia Provincial de Valencia, two appeals of both parties, which they were partially estimated. The Court concluded that "It is declared the contract between the parties dated effects 9 February 2012 by unilateral withdrawal RACV the right to look to perceive, in compensation […] 4.019.760 euros plus interest ".

Supreme Court

Against the judgment of the High Court was filed on 16 November 2016, appeal by the RACV which was dismissed, and I appeal for procedural infringement with another appeal by the entity RACE. The Chamber decided to return performances the audience to admitting the appeal filed by RACE to quantify the damages that the withdrawal had occurred. On the appeal presented by RACE they raised two decisions that had already been discussed previously;

  • There was no term of the indefinite contract transactional agreement 23 December 2003, but it was of unlimited duration, and therefore the withdrawal was admitted without just cause.
  • And there were damages, by which it could not agree on a different repair taken by the first instance, lengthening the continued validity until 23 December 2023 since no one had reduced the term in another. Without seen one "The reformation of the worst" for recurrent. The effects were fixed from Counterclaim.

The 30 May 2017, Provincial Court Valencia set the amount to be received by the RACV in 4.019.760 euros plus interest, applying the criteria requested by the applicant:

Procede por consiguiente fijar en la cantidad en que se fija el perjuicio sufrido por RACV, because unilateral withdrawal without cause of counterpart RACE, as, Under the criteria you feel the party requesting compensation, applying each year remained until fi nishing expected the contract, the canon of 2011. Thus, compensation is fixed by RACE and for RACV, in a total of four million seven hundred nineteen thousand and sixty euros (4.019.760 €), amount will accrue the legal interest of the money from the date of 14 May 2012 (date on which the request was made RACV sheet 1425 I take 2), increased by two points from the date of this resolution, hasta su completo pago.

Against the judgment of the Court, RACE the appealed again to the TS. It is the clear failure, dismissed two actions, I exposing already said in the first instance and reaffirming the doctrine of the room.

Citing STS 672/2016 que ya swe refería a la STS de 9 October 1997 on the issues raised in relation to the desistimiento the nod:En estos supuestos de duración indeterminada las relaciones obligatorias creadas son válidas, but according to our legal tradition, scientific doctrine and say the Civil Code [… ].it follows that you have to admit the impossibility of perpetual reputarlas […] so you power assist Contracting release thereof, by recess, produced by unilateral resolution, conditioned within the parameters of good faith, since the parties should not remain indefinitely linked ". Ese condicionante a los parámetros de la buena fe se encuentra estrechamente relacionado con la figura del forewarningque RACE aceptaba no haber realizado, a term or efficacy standstill period to avoid a unilateral withdrawal surprise. It was logical to take her counterpart measures to protect their interests by adding a clause in the contract.

On the one hand, It is the permanent contract, attends a party the right to unitateral resolution. But this does not exempt you from indemnify the other party for damages to be frustrated the expectations of corporate structure.

Other, the High Court can not enter to value the claims established by the Audiencia:

“[…] It is the doctrine of this Court that the fixing of the amount of compensation for compensation for material and moral damage compensation of damages has no access to appeal, it corresponds to the sovereign function of the lower courts on consideration of evidence, only subject to review, noticeable error or arbitrariness, when there is a noticeable disparity or a violation of the order is made in the determination of the basis taken for the fixing of the amount. In light of the foregoing, the amount of compensation is not subject to appeal, as such, it can only be the legal basis which results in the same. They declare, inter, the judgments of this Court No.. 290/2010, of 11 May, and No.. 497/2012, of 2 September”.

Therefore, se debe respetar el quantum indemnizatorio fijado por la Audiencia, al no considerarse ni ilógico ni absurdo.


Los contratos de duración indefinida se pueden resolver unilateralmente, pues nuestro ordenamiento prohíbe la vinculación perpetua. Pero el límite de esa resolución unilateral está en el principio de buena fe. Es posible establecer pactos para la indemnización por los daños producidos. A falta de estos pactos, se podrá solicitar la indemnización por el perjuicio sufrido, en función de las expectativas creadas y valorando la existencia de mala fe.

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