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VARIATIONS: A slip of the tongue

07 November 2017  

Sapna Garg reports on developments in the oral amendment of contracts

A noteworthy trend at both High Court and Court of Appeal level has emerged recently, such that even where the parties’ written agreement includes a clause providing that variations must be in writing and signed, they may nevertheless later agree new terms in an informal manner. This string of decisions dilutes the primary objective of such ‘anti-oral-variation’ clauses, which aim to increase the level of certainty over what has been agreed by preventing the parties from binding themselves at a later date by informal methods (eg orally, by email, by their conduct). By adopting this approach, the courts have firmly placed the importance of upholding the parties’ original agreement a rung below the traditional English law principle that parties should remain free to agree terms (and at liberty to subsequently vary those terms).

Additional Info

  • Case(s) Referenced:

    Globe Motors Inc & ors v TRW Lucas Varity Electric Steering Ltd & anor [2016] EWCA Civ 396

    MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553

    United Bank Ltd v Asif (2000) unreported, EWCA, 11 February

    World Online Telecom Ltd v I-Way Ltd [2002] EWCA Civ 413

    ZVI Construction Co LLC v The University of Notre Dame (USA) in England [2016] EWHC 1924 (TCC)