No oral modification clause held to be legally effective


In Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, [2018] 2 WLR 1603 the Supreme Court allowed an appeal from the decision of the Court of Appeal (on which see our August/September 2016 issue pp 1–6) and held that effect should be given to a clause which provided that all variations had to be agreed, set out in writing and signed on behalf of both parties before they could take effect. The conclusion is one of some significance given the regular use that is made of such clauses in practice. The outcome of the case was that the oral variation alleged to have been agreed between the parties was held to be legally ineffective. However, the Supreme Court stopped short of saying that such clauses will be effective in all cases to deny legal effect to oral variations. The conduct of the parties may be such as to estop or prevent them from relying on the clause but it was not necessary for the Supreme Court to define the limits of estoppel for the purpose of deciding the appeal before them. It is, however, important to note that the mere fact that the parties have acted inconsistently with the no oral modification clause will not of itself suffice to establish an estoppel.