On the basis that the court held that the oral variation was ineffective, it was not required to rule as to whether a practical benefit, such as an increased chance of payment, can be regarded as good consideration and as such fulfil one of the requirements to create a binding contract (including a variation agreement). However, the court noted that this area of law is “ripe for re-examination” in a future case.
Comment This decision will bring welcome certainty to contracting parties and their advisors. Parties can now be more confident that the written contracts and documentation they possess fully reflect the terms of the agreement, which may in turn reduce the volume and cost of litigation about oral variations. This case also functions as a reminder to parties that when varying a contract, they should check to see if there are any formal requirements for variation. Parties who subsequently wish to dispense with an NOM clause should agree this expressly and record that agreement in writing. The authors would like to acknowledge the assistance of Mitchell Abbott, Trainee Solicitor, in preparing this article.
About the Authors
Luke Pardey Partner, London
Liz Williams Support Lawyer, London
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