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Inefficacy of anti-oral variation clauses

July 2016 - Issue 83

In MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016], the Court of Appeal held that clauses requiring all variations be in writing and signed by the parties does not in fact prevent a valid variation by an oral agreement. Provided sufficient consideration is given, the oral variation is binding. In analysing what amounts to valid consideration it was considered that part payment of a sum already due is not sufficient consideration. On the other hand, a landlord obtaining a practical benefit by keeping a tenant in a property rather than the property being left vacant, in addition to receiving a part payment of rent arrears and a promise that the balance would be paid over the following months, can amount to valid consideration. Lack of economic duress from the tenant and lack of fraud were also relevant factors in arriving at this decision.

This case is relevant for all those entering into contracts and reminds us that care should be taken when discussing contractual matters orally. Be careful not to agree a variation to the contract orally unless you intend to do so and have evaluated the implications of the variation.

Rebecca Palmer

Senior Associate

e rpalmer@prettys.co.uk

t 01473 298274

 

 

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