A “no oral modification” clause (“NOM clause“) is a boilerplate clause included in an agreement to require any variations of an agreement to be in writing. The Singapore Court of Appeal recently held in Charles Lim Teng Siang v Hong Choon Hau [2021] SGCA 43 that a NOM clause which stated that any variation, supplement, deletion, or replacement of a term must be in writing did not preclude an oral rescission of the contract. This decision illustrates the importance of ensuring that NOM clauses are properly drafted such that oral recission and termination are captured in the plain language of the clause if that is intended.
In obiter, the Court of Appeal further expounded on the legal effect of an NOM clause at some length, raising the possibility that despite the presence of an NOM clause, the court may still uphold oral modification or rescission in some circumstances.
We examine the Singapore Court of Appeal’s decision and its implications below.
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