Can an exclusive marketing agreement with indefinite duration be enforceable in Utah? Glacier Land Co. v. Klawe Explained

The Utah Court of Appeals addressed whether an exclusive marketing agreement with an indefinite duration could be enforceable under Utah’s at-will employment doctrine in Glacier Land Co. v. Klawe. The case provides important guidance on when employment contracts can escape the at-will presumption.

Background and Facts

Glacier Land Company entered into an oral agreement with real estate agent Claudia Klawe granting her the exclusive right to market and sell homes in the Monte Luca development. The agreement specified that Klawe would serve as exclusive agent “until all forty-two units were sold.” When Glacier attempted to terminate the relationship in 2002, citing poor sales performance, Klawe sued for breach of contract. Glacier sought summary judgment, arguing the agreement was terminable at will because it lacked a definite duration term.

Key Legal Issues

The primary issue was whether an employment agreement with an “until sold” provision could rebut Utah’s at-will presumption. The court also addressed evidentiary questions regarding witness disclosure requirements and the timing of attorney fee motions.

Court’s Analysis and Holding

The court clarified that Utah’s at-will presumption is not a rigid rule of contract construction, but rather a rebuttable presumption. The presumption can be overcome when parties expressly agree that employment may be terminated only upon satisfaction of an agreed-upon condition. Here, the parties stipulated that they had agreed the contract would terminate upon sale of all Monte Luca units. This express condition was sufficient to rebut the at-will presumption, even though the agreement had an indefinite duration. The court emphasized that parties may freely contract and establish terms, even if those terms might result in hardship for one party.

Practice Implications

This decision demonstrates the importance of carefully drafting termination provisions in employment agreements. While Utah presumes employment relationships are at-will when duration is indefinite, practitioners can overcome this presumption by including express termination conditions tied to specific events or milestones. The case also reinforces the requirement that attorney fee motions must be filed before entry of final judgment to avoid waiver.