Rock Advertising ("RA") fell behind in paying licence fees.
Its sole director proposed a revised schedule of payments to MWB's credit controller.
There was a telephone discussion between them, in the course of which RA's director contended that MWB's credit controller had agreed to vary the licence agreement in accordance with the revised schedule. MWB's credit controller denied this.
She proceeded to treat the revised schedule as a proposal in a continuing negotiation, and took it to her boss. He rejected it.
Later, MWB locked RA out of the premises on account of its failure to pay the arrears, and terminated the licence. They then sued for the arrears.
RA counterclaimed damages for wrongful exclusion from the premises.
The outcome of the case depended on whether the variation agreement was effective in law.
Example of Entire Agreement Clause
In the UK Supreme Court case, the court gave an example of an Entire Agreement Clause:
Entire agreement clauses generally provide that they “set out the entire agreement between the parties and supersede all proposals and prior agreements, arrangements and understandings between the parties.”
An abbreviated form of the above clause was contained in the first two sentences of the Clause in question.
There was an oral agreement between RA's director and MWB's credit controller.
However, the No Oral Modification Clause made the oral agreement invalid because it (the oral agreement) was not set out in writing or signed on behalf of both parties; and
the No Oral Modification Clause deprived the oral agreement of any binding force as a contractual variation.
Action
If you have any questions about the No Oral Modification Clause or other issues, please feel free to call Lam & Co. at 6535 1800.
