Contract Terminable Only on Written Consent of Parties Terminable At Will

The Illinois Appellate Court recently held that a sales representative contract that, according to its own terms, is terminable only upon the written consent of both parties, is actually terminable at will, because contracts of indefinite duration, which the termination provision created, are unenforceable under Illinois law as against public policy. Rico Industries, Inc. v. TLC Group, Inc., 2014 IL App (1st) 131522, February 7, 2014.  Employers and executives should take note of this decision because its holding--that contract termination provisions requiring the consent of both parties are unenforceable--would apply to executive employment agreements and other employment contracts.

Employment agreements should be drafted very carefully in order to avoid pitfalls and clearly establish the intent of the parties.  Is it possible to modify the at-will doctrine in an employment contract and still have an enforceable contract?  Yes.  The at-will doctrine may be modified in an employment contract by specifying a guaranteed term of employment of a definite duration, during which the employee may only be terminated for cause.