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ABSTRACT
Following the United Kingdom Supreme Court decision in Rock Advertising Ltd v MWB Business Exchange Centres Ltd on the issue of ‘no oral modification’ (NOM) clauses, we examine its implications for contractual variations. This article considers the reasons for finding NOM clauses legally effective in English law (a clause commonly included in commercial contracts). It further touches upon the way the law now favours transactional certainty over the protection of vulnerable parties, querying whether the legal certainty for commercial parties that arises as a consequence of giving effect to NOM clauses is as appealing as it may seem.
KEYWORDS:
Acknowledgements
We are grateful to Andrew Summers for his comments on a previous draft.
Notes on contributors
The authors are students at the London School of Economics.
Notes
1 Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24 (UK Supreme Court).
2 MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553 (England and Wales Court of Appeal).
3 Janet O’Sullivan, ‘Unconsidered Modifications’ (2017) 133 Law Quarterly Review 191.
4 Jonathan Morgan, ‘Contracting for Self-denial: On Enforcing “No Oral Modification” Clauses’ [2017] Cambridge Law Journal 589.
5 Ewan McKendrick, ‘The Legal Effect of an Anti-oral Variation Clause’ (2017) 32 Journal of International Banking Law and Regulation 439.
6 MWB v Rock Advertising (n 2).
7 [2016] EWCA Civ 396.
8 MWB v Rock Advertising (n 2) [22].
9 [1990] 1 All ER 512.
10 For critical comment see Kenny Chng and Yihan Goh, ‘A Renewed Consideration of Consideration: MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA CIV 553’ (2016) 16 Oxford University Commonwealth Law Journal 323.
11 Rock Advertising v MWB (n 1) [6] (Lord Sumption).
12 ibid [18].
13 ibid.
14 ibid [20] (Lord Briggs).
15 ibid [11].
16 ibid.
17 ibid [15].
18 ibid.
19 ibid [31].
20 ibid [25].
21 ibid.
22 (1884) 9 App Cas 605.
23 Rock Advertising v MWB (n 1) [18].
24 ibid [20].
25 (n 9).
26 Brian Coote, ‘Consideration and Benefit in Fact and in Law’ (1990) 3 Journal of Contract Law 23, 26.
27 Rock Advertising v MWB (n 1) [10].
28 ibid [13].
29 ibid [15].
30 ibid [13].
31 ibid [30] (Lord Briggs).
32 Gerard McMeel, ‘Documentary Fundamentalism in the Senior Courts: The Myth of Contractual Estoppel’ [2011] Lloyd’s Maritime and Commercial Law Quarterly 185.
33 O’Sullivan (n 3) 196.
34 (n 7).
35 Beatty v Guggenheim Exploration Co (1919) 225 NY 380 [387] (New York Court of Appeals), cited in MWB v Rock Advertising (n 2) [34].
36 Rock Advertising v MWB (n 1) [11].
37 O’Sullivan (n 3) 196.
38 McKendrick (n 5) 443.
39 ibid 444.
40 ibid.
41 Rock Advertising v MWB (n 1) [13].
42 UN Convention on Contracts for the International Sale of Goods (adopted 11 April 1980, entered into force 1 January 1988) 1489 UNTS 3 (Vienna Convention), art 29(2).
43 (4th edn, 2016) art 2.1.18.
44 Rock Advertising v MWB (n 1) [13].
45 McKendrick (n 5) 444.
46 Inntrepreneur Pub Co v East Crown Ltd [2000] 2 Lloyd’s Rep 611 [7], cited in Rock Advertising v MWB (n 1) [14].
47 Rock Advertising v MWB (n 1) [28].
48 ibid [32] (Lord Briggs).
49 ibid [24].
50 ibid [29].
51 ibid [30].
52 [1982] 2 All ER 97.
53 (1972) 223 EG 1945.
54 ibid 1947, quoted in Cohen v Nessdale (n 52) 103.
55 Rock Advertising v MWB (n 1) [31].
56 ibid [16].
57 McKendrick (n 5) 443.
58 Rock Advertising v MWB (n 1) [30].
59 See eg the judgments of the Court of Appeal in J Spurling Ltd v Bradshaw [1956] 2 All ER 121; Thornton v Shoe Lane Parking Limited [1971] 2 QB 163; Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433.
60 Rock Advertising v MWB (n 1) [30].
61 ibid [16].
62 ibid.
63 eg Heard v Pilley [1869] LR 4 Ch 548, 553.
64 [2010] UKSC 14.
65 ibid [86].
66 [1993] Lloyd’s Rep 25.
67 RTS Flexible Systems (n 64) [50].
68 ibid [86].
69 McKendrick (n 5) 445.
70 Contrast the aforementioned examples of Globe Motors (n 7) and RTS Flexible Systems (n 64), as well as Professor McKendrick’s analysis of the case law before the Supreme Court decision (n 5), with the judgments in Rock Advertising v MWB.
71 Morgan (n 4) 600.
72 Lisa Bernstein, ‘Merchant Law in a Merchant Court: Rethinking the Code’s Search for Immanent Business Norms’ (1996) 144 University of Pennsylvania Law Review 1765.
73 Morgan (n 4) 600.
74 Consider article 29(2) of the Vienna Convention and article 2.1.18 of the UNIDROIT Principles, both cited by Lord Sumption in his ‘radical’ judgment, both of which would give effect to variations where there is (reasonable) reliance.
75 In commercial contexts, Lord Bingham emphasised in Homburg Houtimport BV v Agrosin Private Ltd (The Starsin) [2003] UKHL 12 that ‘[l]egal policy favours the furtherance of international trade. Commercial men must be given the utmost liberty of contracting’.
76 See again McKendrick (n 5) 445.
77 Rock Advertising v MWB (n 1) [16].
78 ibid [30].
79 ibid [31] (Lord Briggs).
80 McKendrick (n 5) 445.
81 ibid.