Variation of “no variation” clauses MWB Business Exchange Centres v Rock Advertising
By Sharon Fryer (assisted by Jamie Cawthorn)
The Court of Appeal has held that a clause in a contract which required any variations of that contract to be in writing and signed did not prevent a variation being made by oral agreement. Just as the parties can agree to a clause restricting variation, they can agree, expressly or by implication, to disapply that clause.
MWB operated managed office space. Rock Advertising occupied one of those offices. When Rock failed to pay the licence fee, MWB gave notice purporting to terminate the agreement. Rock disputed the termination, alleging that there had been an oral variation of the agreement, changing the payment schedule. It was held that this constituted an agreed variation, and that the revised payment terms (where some payments were reduced but later payments increased) constituted consideration. Accordingly, MWB were held not to be entitled to terminate the contract.
Parties should be very careful not to do or say anything which could be taken as undermining any contractual provision on which they then seek to rely. Even in the face of a specific clause to prevent oral variation, an oral amendment will stand if agreed by the parties and there is valid consideration.
If you require further information or advice regarding the contents of this article please contact Sharon Fryer.