Law:

Section:

(a) Contract---.------.----Renewal clause, interpretation of---.---Contract having perpetual effect---.---Legality---.---Contract clause stipulating that contract renewable at discretion of only one party---.---Question as to whether trial judge correctly held that renewal clause was clear and that it faithfully represented parties' common intention of granting only one of parties the unilateral option to renew the contract every five years, which the other party would be unable to oppose---.---In the year 1998, the respondents ("pharmacists") decided to affiliate their pharmacy with the appellant's (pharmacist company's) banner---.---Parties entered into a contract of affiliation for a fixed term of five years---.---Contract contained a clause to the effect that it would be renewed automatically unless the respondents gave notice to the contrary---.---By virtue of said clause, the contract was renewed automatically in 2003 and 2008---.---In 2012, appellant notified the respondents that their contractual relationship would terminate as of 2013---.---Respondents objected, arguing that the contract of affiliation was to be renewed automatically unless they gave notice to the contrary; that nothing in the renewal clause entitled appellant to oppose such renewal---.---Appellant argued that it could oppose the renewal and terminate the contract upon the expiry of the term; that the interpretation proposed by the respondents could have the effect of binding the parties in perpetuity, which would be contrary to public order; that the contract should therefore be considered to be one for an indeterminate term which could be resiliated at any time on reasonable notice---.---Trial judge declared that the contract was renewed and that appellant could not resiliate the contract without cause as it had tried to do in the present case, and that unilateral renewal clauses were valid (under Quebec law) even though they might give a contract perpetual effect---.---Appellate Court affirmed the of trial judge by holding that contracts that could have perpetual effect were not prohibited (under the Civil Code of Qu bec), and such contracts violated no fundamental value of the…