Actions speak louder than words: making oral changes to a written contract

The Court of Appeal recently supported a defendant company over changes to a contract that were made orally rather than in writing in MWB Business Exchange Centres v Rock Advertising, despite the contract containing an express provision requiring any variations to be in writing and signed by both parties.

The case concerned a licence agreement entered into by the defendant, Rock Advertising, to occupy premises in central London managed by the claimant, MWB Business Exchange Centres. When Rock Advertising fell into arrears on licence payments, MWB excluded them from the premises, terminated the agreement and issued proceedings to recover the amounts due. Rock Advertising argued that it had been wrongfully excluded from the premises on the basis that the parties had orally agreed to reschedule the licence payments.

The Court of Appeal decided in favour of Rock Advertising, stressing the importance of party autonomy and the freedom of the parties to agree whatever they wish. This case supports the argument that parties are not precluded from varying the terms of a contract by oral agreement or conduct even where the contract contains an express clause requiring any variations to be in writing and signed.

However, the Supreme Court granted permission in January 2017 to appeal the decision of the Court of Appeal. Although the hearing date is not yet known, the appeal is expected to be heard later this year.