Anti-oral variation clauses are common in most commercial contracts and aim to restrict variation of an agreement only to those variations agreed in writing by all parties.
But think twice before you agree an oral change to the terms of your contract, for example with your fresh food suppliers, or perhaps a change to the frequency or amounts of payments due under a contract. As a result of recent decisions in the courts, such oral agreements might permanently vary your contract, even if it contains an anti-oral variation clause.
The Court of Appeal looked at the enforceability of anti-oral variation clauses in two separate cases recently. In a case involving Globe Motors the Court of Appeal held that in principle a contract containing an anti-oral variation clause could still be by varied by an oral agreement. The same conclusion was reached in a similar case for MWB. The Lord Justices ruled in both cases that the parties to a contract have the autonomy to agree whatever they wish, despite any previous agreement to the contrary.
The decisions in these cases do appear to weaken standard variation clauses. Nevertheless, anti-oral variation clauses remain of some use in practice, as they raise the bar in terms of showing that the oral discussion was intended to constitute a variation.
Practical pointers:
To reduce the risk of employees inadvertently varying an important agreement you could specifically identify individuals in the agreement that can agree variations to it.
If an employee attempts orally to vary the agreement, and is not a named individual with the necessary authority, then the oral variation is unlikely to be binding.
