IV. E. — 2:302 Contract for an indefinite period

Either party to a contract for an indefinite period may terminate the contractual relationship by giving notice to the other.

If the notice provides for termination after a period of reasonable length no damages are payable under IV. E. — 2:303 (Damages for termination with inadequate notice). If the notice provides for immediate termination or termination after a period which is not of reasonable length damages are payable under that Article.

Whether a period of notice is of reasonable length depends, among other factors, on:

A period of notice of one month for each year during which the contractual relationship has lasted, with a maximum of 36 months, is presumed to be reasonable.

The period of notice for the principal, the franchisor or the supplier is to be no shorter than one month for the first year, two months for the second, three months for the third, four months for the fourth, five months for the fifth and six months for the sixth and subsequent years during which the contractual relationship has lasted. Parties may notexclude the application of this provision or derogate from or vary its effects.

Agreements on longer periods than those laid down in paragraphs (4) and (5) are valid provided that the agreed period to be observed by the principal, franchisor or supplier is no shorter than that to be observed by the commercial agent, the franchisee or the distributor.

In relation to contracts within the scope of this Part, the rules in this Article replace those in paragraph (2) of III. — 1:109 (Variation or termination by notice). Paragraph (3) of that Article governs the effects of termination.