Not only does “headings are for convenience only” means what it says (see our note on Citibank N.A. v Oceanwood Opportunities Master Fund), so does “any amendment must be in writing”. The 14-page Supreme Court judgment on Wednesday in Rock Advertising Ltd v MWB Business Exchange Centres Ltd is not revolutionary. The facts are simple: Rock was occupying space in an MWB business centre under a contract that said that “variations to this licence must be agreed, set out in writing and signed on behalf of both parties before they take effect”. Rock was behind in its rent and reached agreement with an MWB credit controller over the phone to reschedule its payments, but the controller’s boss did not agree, and instead Rock was evicted! It claimed breach of contract and MWB relied on the “no oral modification” clause.
The problem with an NOM clause is, to quote from the DLA Piper standard legal opinion:
“any provision which requires amendments or waivers of a document to be in writing may not be effective insofar as it suggests that oral or other amendments or waivers could not effectively be agreed upon or granted by or between the parties or implied by the course of conduct of the parties”
This actually goes back to the great American judge Benjamin Cardozo in a 1919 NY case, Beatty v Guggenheim Exploration: “Those who make a contract may unmake it. The clause which forbids a change may be changed like any other. The prohibition of oral waiver may itself be waived”.
It is difficult to disagree. Lord Sumption argued for upholding the NOM clause and dealing with any subsequent issues on the basis of whether the parties had estopped themselves from denying that there had been a waiver. Lords Sumption and Briggs agreed that in this case Rock and MWB had not effectively amended the agreement (and MWB had not estopped itself), but Lord Briggs more conventional judgment is preferable, reasoning that a NOM clause could be amended orally, but the very fact that the parties had orally agreed to amend some other clause did not mean that they must be taken to have impliedly orally amended the NOM clause too. He drew the analogy with negotiations agreed “subject to contract”: you may have an agreement, but so long as it is subject to contract it will be unenforceable, absent estoppel.
It is notable how the English Supreme Court refers to precedents in new York, Australia, Canada, and even Germany, and Lord Briggs ends his judgment with a reference to “an international common law consensus”. It is worth reflecting on how international the approach of the English courts is and the remarkable ambit of the common law – which bridges the Atlantic, encompasses the Indian sub-continent, large parts of Africa, Australasia, HK, Malaysia and Singapore, and has recently been expressly incorporated into the laws of the DIFC.