Contracts are the bedrock of our economy. Without legally enforceable contracts, the trust that creates business relationships would be impossible.
That being said, the law of contracts is notoriously vague and nebulas. Simple questions, such as when a contract or a contract term is enforceable, can be incredibly difficult to answer.
Among the most challenging contract conundrums is whether a written contract can be orally modified.
If you’re faced with this problem, here are a few things to consider:
The statute of frauds
The statute of frauds limits how certain contracts can be modified. It prevents oral modification of all contracts:
- for the sale of goods over $500
- that assign responsibility to one party for another party’s debt
- for the sale or transfer of land
- that will take more than a year to perform
If your contract meets any of the above criteria, it is impossible, even if so desired by the parties, to modify orally.
Beware of no oral modification clauses
Some parties attempt to avoid the oral modification quagmire by including a “no oral modification” (NOM) clause in the contract.
Although this sounds like a convenient solution, businesses should view such clauses with skepticism. Courts have historically assigned little weight to NOMs, relying on other factors instead. In fact, courts have even admitted evidence that the NOM itself was orally waived by the parties.
Contract law is often ambiguous and slippery, as the above discussion demonstrates. For this reason, Long Beach residents should always seek professional help when drafting any formal agreement.