Are ‘No Oral Modification’ clauses valid and enforceable in the face of a subsequent oral agreement?
Yes, held the Supreme Court in Rock Advertising v MWB Business Exchange Centres.
The Appellant entered into a licence agreement with the Respondent to occupy office space for 12 months. Having fallen into arrears with rent payments, the Appellant contended that the payment terms had been orally varied.
The Supreme Court held that the oral variation in this case was not legally effective, because an express clause in the written contract required any variations to be in writing and signed. It left open the possibility of arguing that one party was estopped from relying on the strict written terms.
Now we just need an employer to argue that a pay increase is invalid because it was only sent in a letter, rather than in a subsequent agreement signed by both sides…
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