Dear Claire – Summer 2018
09 / 07 / 2018
Perplexed by property law? Relax, Solicitor Claire Haynes is here to answer your most pressing questions…
Q: My business has a licence to occupy serviced office premises. In return for occupying the premises for a longer period the landlord orally agreed with me to reduce the payments under the licence. The landlord is now back tracking and saying that I proposed new terms, but they were not agreed. Can I enforce my conversation with the landlord?
A: A variation to a contract can be oral or in writing. However it would be usual for a licence granting permission to occupy premises to contain wording which restricts variation of the licence to those variations agreed in writing between occupiers and the landlord. These clauses are sometimes called ‘no oral modification’ or ‘no oral variation’ clauses. The purpose of a clause of this nature is to exclude informal or inadvertent variations being made to the licence and to minimise disputes as to whether a variation had been intended and its exact terms. No oral modification clauses are also used to prevent those without authority agreeing to variations of the licence.
The Supreme Court has recently considered a similar case in which it ruled that a clause restricting oral variations to an agreement could not be ignored. The Court gave effect to contractual provisions requiring specified formalities to be adhered to for a variation as this reflected the intentions of the parties at the time they entered into the agreement.
Your situation turns on the specific wording of the licence, but in the event such a clause is included in the licence, you are unlikely to be able to enforce the terms that the landlord agreed in conversation with you.