MBE Rules · Contracts
No-Oral-Modification Clauses
UCC §2-209(2),(4)
The rule
Signed terms excluding oral modification are effective under the UCC (between merchants, on a merchant's form, the other party must separately sign); failed oral modifications may still operate as waivers, retractable prospectively.
In plain English
No-Oral-Modification Clauses are provisions in contracts that state any changes must be made in writing and signed by both parties. Under the UCC, these clauses are enforceable between merchants, but if one party attempts to modify the contract orally, it may still act as a waiver of the original terms, which can be retracted in the future.
Worked example
A supplier and a retailer enter into a contract that includes a No-Oral-Modification Clause. The supplier later agrees over the phone to lower the price of goods, but the retailer does not sign a written modification. When the supplier later insists on the original price, the retailer argues the oral modification should apply. The court finds that the oral modification is not enforceable, but the supplier's agreement may be seen as a waiver of the original price, which can be retracted.
Memory hook
No oral changes, only written exchanges!
The trap
Exams may present scenarios where students assume an oral modification is valid despite a No-Oral-Modification Clause, leading to incorrect conclusions. Students might overlook that an oral modification can still act as a waiver.
How examiners test it
Questions often involve a factual scenario where a party attempts to modify a contract orally, testing the student's understanding of the enforceability of such modifications under the UCC.
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