MWB Business Exchange Centres Ltd v Rock Advertising Ltd
[2016] EWCA Civ 553
In June’s Issue No. 192 of Dispatch we discussed the case of Globe Motors v TRW Lucas [1]. Like London buses, you wait 15 years for a case on anti-oral variations and then two come along at once. The dispute here related to a claim against Rock for arrears of licence fees and other charges. Rock had issued a counterclaim relying upon an oral agreement. The Judge at first instance agreed that there was an oral agreement and that the individual who made that agreement had at least ostensible authority to commit MWB to such an agreement of this kind. However, MWB relied upon the express terms of the original written agreement. Clause 7.6 provided:
“This licence sets out all of the terms as agreed ... No other representations or terms shall apply or form part of this licence. All variations to this licence must be agreed, set out in writing and signed on behalf of both parties before they take effect.”
The Judge at first instance agreed with MWB and held that this was a clear clause which precluded an oral renegotiation of a core term of the agreement. Rock appealed saying, amongst other things, that the Judge was wrong to hold that clause 7.6 precluded any variation of the contract other than one in writing in accordance with its terms. Rock said that it was open to the parties to vary the contract as a whole, including clause 7.6, orally or in any other way they chose. Perhaps unsurprisingly, the CA here agreed with their colleagues in the Globe case. MWB said that two parties who enter into a contract may agree what they like. Here, the parties agreed by clause 7.6 that any variation of the licence must be in writing and signed by both parties and there were good policy reasons for upholding that agreement. LJ Kitchen disagreed. The most powerful consideration was that of “party autonomy”. LJ Kitchen went on to refer to the words of Cardozo J nearly 100 years ago in the New York Court of Appeals in Alfred C Beatty v Guggenheim Exploration Company (1919) 225 NY 380 where he said that:
“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 … What is excluded by one act, is restored by another. You may put it out by the door, it is back through the window. Whenever two men contract, no limitation self-imposed can destroy their power to contract again…”
Case over-turned on appeal. See Issue 216 [2].
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