I thought the Court of Appeal's judgment in this case unfortunate and
was inclined to be very pleased with the UKSC's reversal. I have to
admit that Paul's email has made me reconsider to some extent. The
points he makes are good ones.

I still say that NOV clauses are useful. For every case where Paul
can point to an oral variation that was agreed to and then reneagued
on, I suspect several cases could be found in which the alleged oral
variation was never made and in which the parties have been put to the
trouble of litigation as a result. The cost of litigation is huge and
not just in financial terms but also in wasted time that could have
been more positively applied elsewhere an in the very real stress and
worry that clients experience throughout the process.

Perhaps a middle way would be to allow NOV clauses and entire
agreement clauses in certain classes of contracts, say B to B
contracts and not in B to C contracts? A statute would be required. At
least then, we could say that commercial parties were expected to look
after themselves, while consumers had full protection and the doctrine
of estoppel could deal with the most aggregious cases where a NOV
clause was relied on.

A statute would also deal with concepsual objections such as those
Robert has raised.

Kind regards

Ger

On 5/16/18, Paul Stanley QC <PStanley@essexcourt.net> wrote:
> TT Arvind writes:
>
> ==QUOTE==
> You'll typically find them in contracts involving companies, and they're
> usually there in order to limit the power of the employee dealing with a
> particular transaction to alter standard terms willy-nilly in a chat over
> the phone. The rules on authority very rightly let counterparties assume
> that the employee they're dealing with has the power to alter terms, and if
> a company wants to restrict that, inserting a NOM clause is a good way to
> achieve that. The other party has had notice that renegotiations will need
> to follow a particular process, and can't complain if they're held to that.
> ==UNQUOTE==
>
> To me this is a big part of the problem. In real life, contractual parties
> (including "sophisticated" ones) *actually* depend upon and rely upon things
> people say bearing on concrete issues far more than they do on the
> "contract". If the person who is actually handling your deal on a day-to-day
> basis agrees X, Y, and Z, without anyone ever mentioning the boilerplate in
> the contract, it seems to me to be a species of sharp practice to turn
> around later an point to the "small print" as a way of weasling out of that.
> Very convenient, of course, for organisations which would rather not bother
> to make sure their representatives behave properly, and put the risk of
> deliberate or careless contractual maladministration on the shoulders of the
> customer for no more than the price of a standard clause. (Indeed, sometimes
> incentivise it.)
>
> I think there is a conceptual problem, but not the one Lord Sumption thinks
> there is. Where do we strike the balance between contract as a set of rules
> which, among other things, impose some measure of commercial morality on
> business, and contract as a device which enables the well-advised to
> construct a legal regime--as red in tooth and claw as they care or dare to
> make it--which happens to suit their commercial purposes? Is it better to
> reach swift, decisive, easy, but unjust decisions than to risk getting one's
> hands dirty in the mire that is actually finding out what happened?
>
> There are (or were) a bunch or rules which gave priority to reliance
> interests which are, in human and social terms, strong (what a flesh and
> blood individual has told me is going to happen) over those which are, in
> human and social terms, weak (what clause 25.2.3.2 of the terms and
> conditions that I clicked to say I agreed with happens to say, probably next
> to something about the singular including the plural, male including female,
> and notices being deemed valid if delivered by first class post: i.e. stuff
> that *literally nobody reads*). The pendulum has now swung. First the highly
> questionable idea that you can contract out of the right to rescind for
> misrepresentation simply by "agreeing", contrary to fact, that the
> counterparty is not relying on any representations. Now this.
>
> So for me, yes it is conceptual--but not in the sense Lord Sumption has in
> mind, as if "concepts" were somehow unwelcome guests at the jurisprudential
> feast. It's conceptual in the sense that there's a fight between treating
> contract as a luxurious and largely uncontrolled form of ad hoc legislation
> in the hands (usually) of the stronger party, or treating it as grounded in
> some sense in the idea that people should do what they have said they will.
>
> I wonder whether the Facebook etc scandals--where in essence it has become
> apparent that unregulated contractual terms have miserably failed to deliver
> to consumers what they believed they were getting--may set the pendulum
> swinging the other way? It's almost an iron rule that the Supreme Court
> reflects the prejudices of the generation that is about to retire, so the
> current SC falls under the heavy shadow of the "Tom Denning is a mad old
> dinosaur" school of thought, with a profound complacency about the essential
> decency of "major firms", which the next generation may find ... naive?
>
> Paul
>
> PS: An (apocryphal) story about Christopher Staughton.
>
> When I first came to the bar, the commercial court had a steady diet of
> cases in which (usually Greek) shipowning magnates were sued on personal
> guarantees given to banks to support heavy borrowing by one-ship companies.
> The defence was always the same: no intention to create legal relations. "I
> did sign the guarantee, but it was not intended to be legally binding: my
> dear old friend the Bank Manager told me that it was just a tedious
> administrative necessity but would never be sued upon." The outcome was also
> always the same: the defence was rejected at the summary judgment stage on
> the basis that it was inconceivable that Bank Manager X would have said such
> a thing--why bother taking a guarantee unless it was to be enforced? A lie,
> then, so obvious, that it could be dismissed without a trial.
>
> One day, Sir Christopher had to go to the bank to open an account for an
> unincorporated association. The Bank asked for a personal guarantee from the
> committee members. "I'm sorry to have to ask for it, Sir Christopher," said
> the obsequious agent, "but it is standard procedure. It is a mere formality
> for the files, and of course we would never enforce it."
>
> I'm not sure it made (or should have made) any difference to his subsequent
> judgments. But how much simpler nowadays. No need even to descend to whether
> such a thing was said: just add an entire agreement clause, a no-reliance
> clause, and a no oral variation clause. Job done, whatever was said. P.
>
> --
> Paul Stanley QC
> Essex Court Chambers
> 24 Lincoln's Inn Fields
> London WC2A 3EG
> T +44 20 7813 8000
> D +44 20 7147 7340
>
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