- No oral modification clause and estoppel (Re High Street Rooftop Holdings)
- What are the practical implications of this case?
- No oral variation clause and estoppel
- What was the background?
- What did the court decide?
- Case details
Commercial analysis: This case concerned an attempt by a borrower to argue that no event of default had arisen under its Facility Agreement because the repayment terms had been varied by oral agreement or the lender was estopped from relying on its terms as a result of representations allegedly made on its behalf. The issue arose in the context of a contested administration application by a qualifying floating charge-holder under paragraph 35 of Schedule B1 to the Insolvency Act 1986 (IA 1986). The court gave effect to a no oral variation clause and held that in consequence the borrower company had to fall back on the doctrine of promissory estoppel. Applying Actionstrength v International Glass Engineering and MWB Business Exchange Centres v Rock Advertising Ltd, the court held that the company was unable to establish estoppel as none of the alleged representations (even if they were in fact made) would have constituted a sufficiently unequivocal representation that the variation to the Facility Agreement was valid notwithstanding its informality. Written by Matthew Maddison, barrister at Enterprise Chambers.
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