The parties disputed whether a contract (licence to occupy an office) had been varied by an oral agreement, where the terms prohibited such.
Held: The ‘no oral variation’ clause applied. Such clauses were in common commercial use and served a legitimate purpose. Though there is no common law rule against an oral variation, contract law should not normally frustrate the uses of businessmen.
‘the law should and does give effect to a contractual provision requiring specified formalities to be observed for a variation.’
‘What the parties to such a clause have agreed is not that oral variations are forbidden, but that they will be invalid. The mere fact of agreeing to an oral variation is not therefore a contravention of the clause. It is simply the situation to which the clause applies. It is not difficult to record a variation in writing, except perhaps in cases where the variation is so complex that no sensible businessman would do anything else. The natural inference from the parties’ failure to observe the formal requirements of a No Oral Modification clause is not that they intended to dispense with it but that they overlooked it. If, on the other hand, they had it in mind, then they were courting invalidity with their eyes open.’
Lady Hale, President, Lord Wilson, Lord Sumption, Lord Lloyd-Jones, Lord Briggs
[2018] UKSC 24, [2018] WLR(D) 301, UKSC 2016/0152
Bailii, WLRD, Bailii Summary
England and Wales
Citing:
Appeal from – MWB Business Exchange Centres Ltd v Rock Advertising Ltd CA 21-Jun-2016
The parties had contracted to provide and occupy office space, but later purported to agree an oral variation of the written payment schedule. The supplier then sought to enforce the written agreement saying that the contract contained a clause to . .
Cited – Liebe v Molloy 29-Oct-1906
A building contract and a specification provided that no extras should be allowed or paid for unless ordered in writing by both architect and employer. When the building had been completed disputes arose upon claims made by the builder for extras. . .
Cited – Shelanu Inc v Print Three Franchising Corp 20-May-2003
(Court of Appeal for Ontario) . .
Cited – Beatty v Guggenheim Exploration Co 1919
Cardozo J said: ‘Those who make a contract, may unmake it. The clause which forbids a change, may be changed like any other. The prohibition of oral waiver, may itself be waived. ‘Every such agreement is ended by the new one which contradicts it’ . .
Cited – Re Commonwealth of Australia v Crothall Hospital Services (Aust) Limited (Formerly) Crothall and Co (Nsw) Pty Ltd 17-Aug-1981
(Federal Court of Australia) . .
Cited – Colautti Construction Ltd v City of Ottawa 22-May-1984
(Ontario Court of Appeal) The plaintiff contracted to install a new sewer line for the defendant city. The line marked for excavation was too close to a water-main and, after some work had been done, had to be relocated causing additional cost. The . .
Cited – United Bank Ltd v Asif CA 11-Feb-2000
Sedley LJ refused leave to appeal from a summary judgment on the ground that it was ‘incontestably right’ that in the face of a No Oral Modification clause ‘no oral variation of the written terms could have any legal effect.’ . .
Cited – World Online Telecom Ltd v I-Way Ltd CA 8-Mar-2002
A contract provided against it variation save in writing and signed. A claim was made relying upon an oral variation.
Held: It was a sufficient reason for refusing summary judgment that ‘the law on the topic is not settled.’ . .
Cited – Energy Venture Partners Ltd v Malabu Oil and Gas Ltd ComC 17-Jul-2013
Gloster LJ declined to decide the point but ‘incline[d] to the view’ that clauses not permitting variation of a contract without the variation being in writing were ineffective. . .
Cited – Globe Motors, Inc and Others v TRW Lucas Varity Electric Steering Ltd and Another CA 20-Apr-2016
Globe, component manufacturers had a contract to supply TRW. The contract was exclusive. It contained a clause disallowing any amendment.
Held: (Obiter) Beatson LJ thought such clauses unenforceable. . .
Cited – Evans and Son (Portsmouth) Ltd v Andrea Merzario Ltd CA 1976
The defendants had carried previously goods aboard ship for the plaintiffs. This time, they were asked for and gave an oral re-assurance to the plaintiffs that the goods would be carried below deck. This did not happen and the goods were swept . .
Doubted – Brikom Investments v Carr 1979
A reversioner can grant rights in respect of covenants in the lease which bind reversioners by way of a collateral contract. When a person makes a representation intending that another should act on it: ‘It is no answer for the maker to say: ‘You . .
Cited – Inntrepreneur Pub Co v East Crown Ltd 2000
The ‘entire agreement’ clause contained in a lease not only had the effect of rendering evidence of an alleged collateral warranty inadmissible, but also deprived the warranty of all legal effect. It did not collapse the lease in on itself. Lightman . .
Cited – Business Environment Bow Lane Ltd v Deanwater Estates Ltd CA 27-Jun-2007
Enforcement of repairing obligations in lease after assignments, and the use of collateral contracts. Sir Andrew Morritt C said: ‘The law relating to collateral contracts is well-established but in connection with sales or leases of land needs to be . .
Cited – Ryanair Ltd v SR Technics Ireland Ltd QBD 20-Dec-2007
. .
Cited – North Eastern Properties Ltd v Coleman and Another CA 19-Mar-2010
The appellants challenged specific performance orders obliging them to complete the purchase of apartments, saying that the contracts had not complied with the 1989 Act, and that their repudiation of the contracts had been accepted. The contracts . .
Cited – McGrath v Shah ChD 22-Oct-1987
John Chadwick QC said of a clause restricting a contract variation not in writing: ‘One can see why such a provision is included in a contract for the sale and purchase of land. All material terms of a contract for the sale of land must be evidenced . .
Cited – Deepak Fertilisers and Petrochemicals Corporation v ICI Chemicals and Polymers Ltd and Another ComC 30-Sep-1997
Trial of preliminary issue – Negligent Misrepresentation – Breach of Collateral Warranties – Breach of duty of care – Breach of contract (Davy Mckee only). . .
Cited – Deepak Fertilisers and Petrochemical Corporation v Davy McKee (London) Ltd; ICI Chemicals and Polymers Ltd CA 12-Nov-1998
Deepak’s plant was built with know-how derived from ICI via one of ICI’s licensees, Davy. The contract between Davy and Deepak contained (it was assumed) a promise by Deepak to indemnify ICI. The plant was severely damaged by an explosion and Deepak . .
Cited – Matchbet Ltd v Openbet Retail Ltd ChD 11-Oct-2013
Claim for damages for alleged breaches of a software licensing and development agreement – variation of contract in breach of entire agreement clause . .
Cited – ZCCM Investments Holdings Plc v Konkola Copper Mines Plc ComC 14-Dec-2017
. .
Cited – Triple Point Technology, Inc v PTT Public Company Ltd TCC 23-Aug-2017
. .
Cited – Adibe v National Westminster Bank Plc ChD 16-Mar-2017
. .
Cited – Mileform Ltd v Interserve Security Ltd QBD 5-Nov-2013
This case concerns the terms and formation of a contract for the provision of warehousing, packaging, distribution and storage services. The critical question for the Court’s determination is whether the agreement reached between the parties, on or . .
For Examination later – Foakes v Beer HL 16-May-1884
Mrs Beer had obtained judgment against Dr Foakes for andpound;2,090 19s. He asked for time to pay and they agreed with him, acknowledging the debt, and paying part immediately and undertaking to pay the balance over a period of time. In . .
Cited – Williams v Roffey Brothers and Nicholls (Contractors) Ltd CA 23-Nov-1989
The defendant subcontracted some of its work under a building contract to the plaintiff at a price which left him in financial difficulty and there was a risk that the work would not be completed by the plaintiff. The defendant agreed to make . .
Cited – Moran Yacht and Ship Inc v Pisarev and Another CA 11-Feb-2016
. .
Cited – In Re Selectmove Ltd CA 21-Dec-1993
Promisse to Pay Tax due is not Consideration
The company appealed against an order for its winding up, saying that the debt was disputed, an accomodation having been reached with the Revenue.
Held: The court declined to regard a promise to the Revenue by a company to pay its existing . .
Cited – Moran Yacht and Ship Inc v Pisarev and Another Re 4You ComC 10-Apr-2014
Claim by brokers for commission on the sale of a superyacht. . .
Cited – Actionstrength Limited v International Glass Engineering In Gl En SpA and others HL 3-Apr-2003
Actionstrength agreed with Inglen to provide construction staff to build a factory for St-Gobain. Inglen failed to pay. Actionstrength claimed against for the amount due. Inglen went into liquidation. The claim was now against St-Gobain. The claim . .
Cited – Tevanon v Norman Brett (Builders) Ltd 1972
Brightman J said: ‘parties could get rid of the qualification of ‘subject to contract’ only if they both expressly agreed that it should be expunged or if such an agreement was to be necessarily implied . . ‘ [W]hen parties started their . .
Cited – Sherbrooke v Dipple 1980
Parties to a conveyancing context can get rid of the qualification ‘subject to contract’ only if either they both expressly agree that it should be expunged or if such an agreement can be necessarily implied. . .
Cited – Cohen v Nessdale Ltd CA 1982
Once negotiations are begun ‘subject to contract’, that label governs all subsequent communications between the parties unless the label is expunged by express agreement or by necessary implication. . .
Cited by:
Cited – Pimlico Plumbers Ltd and Another v Smith SC 13-Jun-2018
The parties disputed whether Mr Smith had been an employee of or worker with the company so as to bring associated rights into play. The contract required the worker to provide an alternate worker to cover if necessary.
Held: The company’s . .
Lists of cited by and citing cases may be incomplete.
Updated: 27 July 2021; Ref: scu.615572
