Can you orally change a written contract? Corporate & Commercial
Most commercial contracts include a provision that the contract may not be amended except in writing and signed by the parties. Such provision is known as a ‘no oral modification’ or ‘NOM’ clause. The aim is to prevent informal, and perhaps inadvertent, oral variations being made to the contract.
Up until recently, the position had been that a NOM clause in a contract did not necessarily prevent a valid variation by oral agreement, as the parties could orally agree not to apply the NOM clause.
However, a recent Supreme Court decision has highlighted that a contract containing a NOM clause can only be varied by the method prescribed by that NOM clause. Failure to follow NOM provisions means that a party seeking to rely on an oral variation is left in a difficult position, opening themselves up to considerable risk of the oral variation not being enforceable.