Pleading 2 shaw
Mr. Hobbs can not rely on the clause 5.3 to argue that the oral agreement was
unenforceable as (a) The oral agreement was followed by a conduct (b) The NOM clause
should be ineffective (c) There had been a Doctrine Of Equitable Estoppel (d) The oral
agreement is a new agreement and not a variation of the previous contract and (e)
Internationally no-oral modification clause doesn’t have a formal effect.
(a)The oral agreement was followed by a conduct
I. A "no oral modification" clause is a provision commonly included in contracts to
require that any changes to the agreement be made in writing and signed by all parties
involved. From the statement facts, it’s clear that Mr. Shaw has acted according to the
oral promise of Mr. Hobbs. He didn’t just made conduct but he also worked over and
above and did everything possible even at the cost of his own financial situation just to
safeguard Mr. Hobbs. From the judgments of Rock Advertising Ltd v MWB Business
Exchange Centres Ltd [2018] UKSC 241
the judges were on the fact that “The law does give effect to the provisions of the party
has acted according to the oral agreement and the court will found that the parties had
agreed to modify the agreement orally, despite the presence of the no oral modification
clause.”
So it’s clear that Mr. Shaw has worked according to the oral agreement and thus the
NOM clause should not be invoked.
(II) Mr. Shaw has acted in reliance to the oral agreement. He just didn’t give up other
suppliers but he also hired a new team to complete the oral agreement and bought a new
warehouse so that he can complete the target and get the bonus amount. According to the
case of Rolls Royce Holding PLC and Goodrich Corp 20222 “One party can not rely on
the no oral modification clause if the other party has relied on the oral modification and
acted according to it”
As Mr. Shaw acted according to the oral agreement so Mr. Shaw can not rely on the
NOM clause.
(b) The No Oral Modification clause should be unenforceable
(I) There had been a discussion between the parties regarding the No Oral Modification
Clause. From the facts, it’s clear that Mr. Shaw did ask Mr. Hobbs regarding the NOM
clause while going for the oral agreement and Mr. Hobbs gave his words to him that the
NOM clause won’t be a issue in between their agreement. According to MWB Business
Exchange Centres LTD v Rock Advertising LTD-20183 when the parties act in a non
1
MWB Business Exchange Centres Ltd [2018] UKSC 24
2
Rolls-Royce Holdings Plc v Goodrich Corporation [2023] EWHC 1637
3
ibid
compliance manner by discussing and reach a agreement , the oral agreement is at least at
the conceptual level no more or less effective than simply including a NOM clause in the
contract.
As there had been a discussion between the parties the oral agreement is completely
enforceable.
(II) The oral didn’t create any misunderstanding between the parties. The parties were
completely aware of their contractual duties and Mr. Shaw acted upon it. According to
MWB Business Exchange Centres LTD V Rock Advertising LTD (above) one of the
reasons of including a NOM clause is to avoid misunderstandings between the parties.
As there is no misunderstanding between the NOM clause should be ineffective.
(C) Mr. Hobbs should estopped from relying on clause 5.3
(I) There had been an express promise or representation on which Mr. Shaw has relied.
According to the case of Brikom Investments LTD v Car -19794 Lord Denning brushed
aside an entire clause believing that “ the cases are legion where a clause should be of no
effect where an express promise and representation had been made” and according to the
case of UK learning academy V Secretary of State For education 20205 where there had
been a representation the other is estopped from relying on the NOM clause.
So as there had been a representation or promise Mr. Hobbs is estopped from relying on
the NOM clause.
(II) Mr. Hobbs has provided indemnity to Mr. Shaw. According to the facts Mr. Hobbs
has given assurance to Mr. Shaw that no matter what happens Mr. Shaw will paid for his
conduct. According to the case of Pao On V Lau Yiu Long (1980)6 as there had been an
indemnity promise, the price should pay in accordance with the indemnity.
As Mr. Hobbs has provided express promise or representations and indemnity promise to
Mr. Shaw, he should be estopped from relying on the 5.3 clause.
1. The oral agreement is completely a new agreement.
(I) The collateral agreement is an agreement and is supported by its own
consideration. Not only Mr. Shaw has given new consideration for the oral agreement but
also there had been a totally new circumstance in regards of dealing where they meet to
discuss the agreement. According to the cases of Business Environment Bow Lane LTD
4
Brikom Investments Ltd v Car ([1979] Q.B. 467, CA (Eng)
5
UK Learning Academy Ltd v Secretary of State for Education [2020] EWCA Civ 370
6
Pao On v. Lau Yiu Long [1979] UKPC 17
and Dean Water Estates LTD -20077 and North Eastern Properties LTD8 and Coleman
-2010 “ the oral agreement is capable of operating as an independent agreement and if it’s
supported by it’s own consideration the most standard forms of entire agreement clause
will not prevent it’s enforcement”
So, as the oral agreement is totally a new agreement and it is supported by its own
consideration, 5.3 clause can not stop its enforcement.
1. International NOM clauses does not always have a legal effect. The reasons
advanced in the case law for disregarding them are entirely conceptual. The argument is
that it is conceptually impossible for the parties to agree not to vary their contract by
word of mouth because any such agreement would automatically be destroyed upon their
doing so. The difficulty about this is that if it is conceptually impossible, then it cannot be
done, short of an overriding rule of law (presumably statutory) requiring writing as a
condition of formal validity. Yet it is plain that it can. There are legal systems which have
squared this particular circle. They impose no formal requirements for the validity of a
commercial contract, and yet give effect to No Oral Modification clauses. The Vienna
Convention on Contracts for the International Sale of Goods (1980) has been ratified by
89 states, not including the United Kingdom. It provides by art 11 that a contract of sale
“need not be concluded in or evidenced by writing and is not subject to any other
requirement as to form.” Nonetheless, art 29(2) provides: “A contract in writing which
contains a provision requiring any modification or termination by agreement to be in
writing may not be otherwise modified or terminated by agreement. However, a party
may be precluded by his conduct from asserting such a provision to the extent that the
other party has relied on that conduct.” Similarly, art 1.2 of the UNIDROIT Principles of
International Commercial Contracts, 4th ed (2016), provides that “nothing in these
Principles requires a contract, statement or any other act to be made in or evidenced by a
particular form.” Yet art 2.1.18 provides that “A contract in writing which contains a
clause requiring any modification or termination by agreement to be in a particular form
may not be otherwise modified or terminated. However, a party may be precluded by its
conduct from asserting such a clause to the extent that the other party has reasonably
acted in reliance on that conduct. “These widely used codes suggest that there is no
conceptual inconsistency between a general rule allowing contracts to be made
informally and a specific rule that effect will be given to a contract requiring writing for a
variation.
So, it’s clear that Mr. Hobbs shouldn’t be included with the authority to reply on the 5.3
clause.
7
Business Environment Bow Lane Ltd v Deanwater Estates Ltd [2007] EWCA Civ 622
8
North Eastern Properties Ltd v Coleman & Quinn Conveyancing [2010] EWCA Civ 277
