“No Oral Modification" clause – Arrears - Contractual licences - Estoppel The appellant, the operator of serviced offices, had locked out the respondent occupier following arrears accruing under a contractual licence and sued for the arrears. The respondent counterclaimed for damages for wrongful exclusion, claiming that the terms of the licence had been varied by way of an oral agreement that the arrears would be paid off by instalments. The licence included an NOM clause providing that "All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect". The trial judge had found that an oral agreement had been made, but that it was not binding pursuant to the NOM clause. The Court of Appeal had held that the operator was bound by the variation.
The Supreme Court held that the NOM clause prevented the oral variation from being binding. NOM clauses prevented attempts to undermine written agreements by informal means; they avoided disputes about whether a variation had been intended and about its exact terms; and formality in recording variations made it easier for corporations to police internal rules restricting the authority to agree them. Those were all legitimate commercial reasons for NOM clauses and they should be upheld. On the facts, no estoppel arose. There had to be some words or conduct unequivocally representing that the variation was valid notwithstanding its informality. The Supreme Court did note, obiter, that it seemed questionable whether there had been adequate consideration for the variation, but that they did not proceed to determine this issue.