MWB Business Exchange Centres Ltd v Rock Advertising Ltd

The Supreme Court of the United Kingdom delivered its judgment in the case of Rock Advertising Limited (Respondent) v MWB Business Exchange Centres Limited (Appellant) on 16 May 2018. The case involved a contractual licence agreement between MWB and Rock Advertising for office space in London. The key issue was whether an oral agreement to vary the payment schedule of the licence fee was valid, given the existence of a clause in the written agreement requiring any variations to be in writing and signed by both parties. The Court of Appeal had held that the oral agreement was effective, but the Supreme Court overturned this decision.

The Supreme Court held that a contractual term requiring variations to be in writing is legally effective and should be enforced according to its terms. The court rejected the argument that an oral variation agreement could imply a consent to dispense with the written variation clause. The court found that the oral variation agreement in this case was invalid because it did not comply with the written variation clause. The court also declined to address the issue of consideration, as it was not necessary to do so given the outcome on the written variation clause issue.

The Supreme Court's decision reinforces the importance of contractual certainty and the enforceability of written variation clauses in commercial contracts. The court recognised the commercial benefits of such clauses in preventing informal attempts to undermine written agreements and avoiding disputes about the terms of oral variations. The decision provides clarity for businesses entering into written agreements containing written variation clauses, and confirms that such clauses will be enforced according to their terms.