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Anti-Oral Variation Clauses and Practical Consideration – Supreme Court

MWB Business Exchange Centres Limited –v- Rock Advertising Limited [2016] EWCA Civ 553

MWB operate serviced office spaces and, pursuant to a Licence Agreement, Rock Advertising utilised such accommodation in the form of managed office space. Rock Advertising fell into arrears with the Licence fee and proceedings were issued to recover the arrears.  In the Central London County Court, His Honour Judge Maloney found that the parties had entered into an oral agreement whereby there was a revised payment schedule for the repayment of the arrears.  However, it was held that pursuant to a clause in the Licence Agreement, oral variations to the contract were not permitted unless they were agreed in writing and signed by both parties. The Judge determined that MWB were not bound by the oral agreement by virtue of this clause.

Secondly, the payment of £3,500.00 made by Rock Advertising to MWB was not considered to be a detriment because Rock Advertising were simply honouring their existing obligations and would have been liable to pay that sum in any event.

Rock Advertising appealed to the Court of Appeal and were successful. Following that decision MWB appealed to the Supreme Court.

The Supreme Court has now granted MWB permission to appeal two key arears of law:

  1. Whether a contract can be varied orally despite a clause requiring any variations to be in writing;
  2. Whether the requirement of practical consideration is met by a promise to pay an existing debt.

The Appeal Hearing at the Supreme Court is expected to take place in the early part of next year.

For more details or information regarding this matter please contact Samantha Dawkins of these offices.

Samantha Dawkins (Mrs) Edward Harte LLP

Email: sdawkins@edward-harte.co.uk

Direct: 01273 662756

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