No Oral Modification clauses: a New Zealand perspective

Abstract

The Supreme Court decision of Rock Advertising Ltd v MWB recently reaffirmed the effectiveness of No Oral Modification (NoM) Clauses in written contracts in the United Kingdom. In doing so, it overturned a stream of case law that had denied NoM clauses any effect beyond presenting an evidentiary burden to those parties seeking to rely on an oral modification. This stream of case law was finding favour with a number of New Zealand judges in recent years and so a question to be asked is: will Rock Advertising be rejected or ignored halfway around the world? And should it be? Alternatively, if Rock Advertising is to be followed in New Zealand, which of that case’s approaches is most compelling? While the plurality judgment delivered by Lord Sumption is clear and certain, does it adequately address the conceptual difficulties identified in treating a NoM clause as overriding a latter agreement of the parties? This presentation will discuss the current New Zealand position to NoM clauses and will critique the way in which it seems as if stare decisis has become an optional extra in this area of law. In discussing NoM clauses in New Zealand, this presentation will also look at how these clauses could be affected by the Unfair Contractual Terms provision in the Fair Trading Act 1986 and will place NoM clauses within the wider New Zealand approach to contractual variations.