No oral modification: Overview, definition, and example
What is no oral modification?
No oral modification is a contractual provision stating that any changes to the agreement must be made in writing and signed by all parties. This clause prevents informal or verbal changes from altering the terms of a contract, ensuring that all modifications are documented and legally enforceable.
For example, if two businesses have a written contract with a no oral modification clause, one party cannot later claim that an important term was changed through a verbal agreement. Any modification must be formally documented.
Why is no oral modification important?
A no oral modification clause helps prevent disputes by ensuring that all changes to a contract are clearly recorded. It protects parties from misunderstandings, fraudulent claims, or informal agreements that could later be contested.
For businesses, this clause provides certainty and reduces legal risks by ensuring that all contractual amendments are properly reviewed, agreed upon, and signed. This is especially important in long-term agreements where terms may need adjustments over time.
Understanding no oral modification through an example
A supplier and a retailer enter into a contract stating that the retailer will purchase a fixed quantity of goods each month. Later, during a phone call, the retailer asks to reduce the order quantity, and the supplier verbally agrees. However, because the contract includes a no oral modification clause, this verbal agreement is not legally binding unless both parties sign a written amendment.
In another example, an employer and an employee sign an employment contract that includes a fixed salary. The employer later tells the employee that they will receive a bonus, but the agreement is not put in writing. If a dispute arises, the no oral modification clause means the employee cannot legally claim the bonus unless it was documented in a signed contract amendment.
Example of a no oral modification clause
Here’s how a no oral modification clause might appear in a contract:
“No modification, amendment, or waiver of any provision of this Agreement shall be valid or binding unless made in writing and signed by all parties to this Agreement. No oral statements or representations shall have any effect in modifying the terms herein.”
Conclusion
A no oral modification clause ensures that all contractual changes are properly documented and agreed upon in writing. This protects businesses from disputes over verbal agreements and provides legal certainty. By including this clause, parties can avoid confusion and ensure that any modifications to the contract are valid and enforceable.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.