The case of MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553 was one which came on appeal from Central London County Court, regarding whether the court should allow contracting parties to vary their agreement orally; despite their agreement containing an ‘anti-oral’ variation clause. In the original decision HHJ Moloney established that an oral variation had in fact been agreed to, however it was unable to take effect due to the clear written ‘anti-oral’ variation clause. He also found that MWB was not ‘estopped’ from enforcing their rights under the agreed licence agreement by accepting the £3,500 payment from Rock. However, Rock appealed against both of these findings. The appeal case came to the decision that
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Kitchin LJ discussed the idea that Rock’s payment of £3,500 would be bound by the rule in Foakes v Beer. This suggests that “an obliger by paying all or part of a due, liquidated, and undisputed obligation suffers no detriment he is not bound to suffer” . From this, Arden LJ, acknowledged that this was a credible interpretation of the contractual position. However, Arden LJ added that her initial view was that the parties entered into a ‘collateral, unilateral contract’, suggesting only one party to it makes a promise. From this MWB was bound upon receiving the payment of £3,500 to accept the rescheduling of the licence fees, so far as Rock were able to occupy the rented premises and continued to pay the rescheduled payments. Despite this, Arden LJ accepted that raising the question of a ‘collateral, unilateral contract’ was not actually raised by the parties themselves. From this, Kitchin and McCombe LJJ said that instead preferred not to base their decision on that issue. From this, any legal certainty in a contract is therefore denied, due to the notion that despite an ‘anti-oral agreement clause’, parties could potentially alter agreements orally. This could even lead to parties being apprehensive when entering into a contract, due to the idea that the contract is not even valid upon paper as it can be so easily be altered
Kitchin LJ discussed the idea that Rock’s payment of £3,500 would be bound by the rule in Foakes v Beer. This suggests that “an obliger by paying all or part of a due, liquidated, and undisputed obligation suffers no detriment he is not bound to suffer” . From this, Arden LJ, acknowledged that this was a credible interpretation of the contractual position. However, Arden LJ added that her initial view was that the parties entered into a ‘collateral, unilateral contract’, suggesting only one party to it makes a promise. From this MWB was bound upon receiving the payment of £3,500 to accept the rescheduling of the licence fees, so far as Rock were able to occupy the rented premises and continued to pay the rescheduled payments. Despite this, Arden LJ accepted that raising the question of a ‘collateral, unilateral contract’ was not actually raised by the parties themselves. From this, Kitchin and McCombe LJJ said that instead preferred not to base their decision on that issue. From this, any legal certainty in a contract is therefore denied, due to the notion that despite an ‘anti-oral agreement clause’, parties could potentially alter agreements orally. This could even lead to parties being apprehensive when entering into a contract, due to the idea that the contract is not even valid upon paper as it can be so easily be altered