Oral Modifications Can Change Your Written Contractual Agreements
So you have a written contract, spelling out all the details of your agreement. That contract is the definitive source on what the parties to the agreement can and cannot do. Barring both of you agreeing, nothing could happen into the future that could change what you’ve written…could it…?
In fact, there are situations where later, often oral terms, can serve to modify what is otherwise a definitive and complete written agreement.
How Does it Happen?
This sometimes is done intentionally, but more often than not, it is simply an accident—a modification of the terms of the agreement by the parties, for the purpose of convenience or quickness—after all, going back to the written agreement, and hammering out mutually agreeable contract language takes time and it is much easier to just ask the other side “do you mind if we do X, Y and Z,” and have the other side say “yes.”
But while that method is, in fact, much quicker, it comes with potential danger—that “on the fly” oral agreement could serve as a permanent modification to your written agreement.
That’s because both the course of conduct of the parties’ dealings, and oral agreements, can serve to be future modifications of the prior written agreement. Like any oral agreement, while legally enforceable, you now have a debate over what the rights of the parties are, and whether your written agreement is enforceable at all.
Certainly, you can include a clause that says that the agreement cannot be modified by future oral agreement, or by the actions of the parties. However, even that isn’t foolproof.
Even with such a clause, if the parties agree to a modification that in fact does contradict the terms of the original written agreement, if parties acted in a way that was consistent with the subsequent oral agreement, and that there is consideration for the subsequent oral agreement (that is, someone received something and someone else lost something in the subsequent oral agreement or modification), the written contract could be determined by a court to have been modified.
These requirements avoid fraud. The Courts won’t allow someone to use a subsequent oral agreement, to deceive the other side.
For example, someone can’t say yes to a subsequent oral agreement, and then later, go back and sue the other party under the terms of the prior written agreement. Someone can’t use a subsequent oral agreement to “bait” someone or mislead someone, by saying yes to an oral modification, and then later, going back to enforce the written agreement’s terms.
Quick modifications to contracts can seem like the easy way out. But if you’re intending on enforcing the written provisions of your contract later on, be wary that you may have altered them by subsequently orally agreeing to changes.
Contractual dispute? We can help. Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954-440-3993 today.