When is variation of a contract valid?
When is variation of a contract valid?

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • When is variation of a contract valid?
  • What is variation of a contract?
  • Is consideration required to vary a contract?
  • What are the methods of varying a contract?
  • Written variation of a contract
  • Can you orally vary a written contract—no oral modification (NOM) clauses
  • Variation by conduct and the prevention principle
  • Can you have a unilateral variation of a contract?
  • Can waiver amount to a valid variation of a contract?
  • Does sustained minor breach amount to a valid variation of a contract?
  • more

There are numerous reasons why parties may wish to make changes to their agreement. Most disputes connected with variation of contracts concern whether the variation was effective and valid and, if it was, if it was executed for ulterior, nefarious reasons. This Practice Note considers when and how contracts may be varied.

For detail on how to assign or transfer rights and obligations under a contract by way of assignment or novation see Practice Notes:

  1. What constitutes a valid assignment of a contract?

  2. Novation—why and how to novate a contract

What is variation of a contract?

Not all changes to a contractual relationship amount to an effective or valid variation. Sometimes the changes are such that the end result is not a varied contract but a new one.

It can sometimes be difficult to tell whether a variation is a variation or a rescission of the original agreement:

'…there should have been made manifest the intention in any event of a complete extinction of the first and formal contract, and not merely the desire of an alteration, however sweeping, in terms which leave it still subsisting.' (Lord Haldane in Morris v Baron)

A purported rescission of a contract, which does not 'go to the root of the contract' is a variation only (British and Benningtons v NW Cachar Tea).

Is consideration required