The Amendment of Contract Provisions that Prohibit the Amendment of Contract Provisions (say that five times fast)

Any lawyer who has ever reviewed contracts (so really, any lawyer at all) has likely come across a clause purporting to limit the ability of the parties to subsequently modify or amend the contract.  For example, often times a contract will include language along the lines of: “No amendment or modification of this agreement shall be effective unless evidenced by a writing signed by both parties.”  One imagines that the goal of such a clause is to avoid costly litigation down the road should one of the parties claim the existence of a later oral amendment or perhaps a later modification through continued course of conduct.

But under Washington law, the parties are going to be disappointed if they really wanted to tie their own hands.  That’s because under the general rule in Washington, clauses attempting to restrict subsequent contract modification are unenforceable.  “A paradox of the common law is that a contract clause prohibiting oral modifications is essentially unenforceable because the clause itself is subject to oral modification.”  Pacific Northwest Group v. Pizza Blends, Inc., 90 Wn. App. 273, 277-78 (1998).

So parties are free to orally agree to amend the portion of the contract (either expressly or impliedly) that purports to prohibit oral modification.

However, this quirk of Washington law does not mean that such clauses are entirely useless.  Most importantly, there are exceptions, such as in Washington’s UCC Article 2.  But even where the rule applies, the party asserting a modification or amendment must prove all the usual elements of contract formation. And the fact that the parties previously agreed to honor only written modifications is likely relevant evidence that any subsequent oral communication was not intended to form a new contract.

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2 thoughts on “The Amendment of Contract Provisions that Prohibit the Amendment of Contract Provisions (say that five times fast)

  1. Funny! I also like “Entire Agreement” clauses — like, e.g., “this contract is the entire agreement between the parties.” That is, until we amend it. Orally.

    • Indeed. The good old parol evidence rule, which only applies to prior and contemporaneous oral agreements, but not subsequent oral agreements! Although, NY State has already abrogated the common law rule re “no oral modification” clauses by statute, so this post wouldn’t apply in my former state.

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