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Freedom of no-variation clauses?

September 2016 - Issue 85

It is common for commercial contracts to contain a ‘no-variation clause’ as a standard boilerplate clause in order to encourage parties to adopt an approach to variations which provides certainty. Typically, such a clause will attempt to exclude informal or unintended variations by requiring all variations to be in writing and signed before they are effective.

However, the recent case of Globe Motors Inc v TRW Lucas Variety Electric Steering Ltd [2016] EWCA Civ 396 demonstrates that there is now more freedom for contracts to be varied other than by adopting the contractually-stipulated method of doing so. In Globe Motors, the no-variation clause was not effective to prevent a later variation of the contract, by words or conduct, establishing a move away from the formalities of a no-variation clause.

That being said, there is merit to the inclusion of non-variation clauses as it encourages parties to follow what is stipulated in the contract and will help reduce the scope for disagreements to arise.

If you would like assistance with this, please get in touch with a member of our team.

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It has to be said, that their approach and expertise has been a breath of fresh air in both the quality and  response times of their advice and in their proactive approach and support.

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