Contract Variation CASES
In English law, contract variation refers to an agreement between parties to alter the terms or obligations of an existing contract, requiring mutual consent and consideration.
Definition and Principles
A variation modifies contractual obligations originally agreed upon. For a variation to be legally effective, both parties must mutually agree to the changes, and usually, some form of consideration must be provided.
Key Considerations
- Mutual Consent: Clear agreement from all contractual parties.
- Consideration: Usually required, except in specific circumstances such as deeds or promissory estoppel.
- Formalities: Contracts may specify required procedures for variation, like written notice.
Common Applications
- Adjusting payment terms or deadlines.
- Modifying scope of services or work.
- Updating contract terms to reflect changed circumstances.
Practical Importance
Understanding contract variation ensures parties adapt agreements clearly, legally, and efficiently, reducing potential disputes and ambiguities.
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Coffee sellers accepted payment via a letter of credit in Sterling, despite the contract currency being Kenyan shillings. After Sterling was devalued, they claimed the shortfall. The court held they had permanently waived their right to the original currency by their conduct. Facts The sellers, W.J. Alan & Co. Ltd., contracted to sell coffee to the buyers, El Nasr Export & Import Co., an Egyptian state corporation. Two contracts from May 1967 stipulated the price as “Shs.262/-” per hundredweight (cwt), which was denominated in Kenyan shillings. Payment was to be made via an irrevocable letter of credit. The buyers opened
A main contractor, Roffey, agreed to pay a sub-contractor, Williams, an extra sum to complete work on time. The court held this promise was enforceable as Roffey gained a 'practical benefit', refining the traditional doctrine of consideration. Facts The defendants, Roffey Bros & Nicholls (Contractors) Ltd, were main contractors for a project to refurbish a block of 27 flats. Their own contract contained a penalty clause for late completion. They subcontracted the carpentry work to the plaintiff, Lester Williams, for a price of £20,000. Part-way through the work, the plaintiff realised he had underestimated the cost and was in financial
Following the desertion of two sailors, a ship's captain promised the remaining crew extra wages to sail home. This promise was held unenforceable as the crew were already contractually bound to cover all emergencies, establishing that performing a pre-existing duty lacks consideration. Facts The plaintiff, Stilk, was a seaman on a voyage from London to the Baltic and back. He signed ship’s articles agreeing to be paid wages of £5 per month. The ship originally had a crew of eleven. During the voyage, two of the seamen deserted. The captain, Myrick, was unable to find replacements and, to prevent further
Shipbuilders threatened to breach a contract unless the price was increased by 10% after a currency devaluation. The buyers reluctantly agreed to ensure their ship was delivered. The court held this was economic duress, but the buyers lost their right to repudiate through delay. Facts The plaintiffs, North Ocean Shipping Co Ltd (‘the owners’), contracted with the defendants, Hyundai Construction Co Ltd (‘the shipbuilders’), for the construction of a tanker, ‘The Atlantic Baron’. The price was fixed in US dollars, payable in five instalments. After the first instalment was paid, the US dollar was devalued by 10 per cent. The
A landlord promised to accept reduced rent during WWII due to low occupancy. Although this promise lacked consideration, the court held it was temporarily binding. The case established the modern doctrine of promissory estoppel, preventing a promisor from unenforceably reverting to strict legal rights. Facts In 1937, the plaintiff, Central London Property Trust Ltd., let a block of flats in London to the defendant, High Trees House Ltd., on a 99-year lease at a ground rent of £2,500 per annum. Following the outbreak of the Second World War and the resulting difficulty in letting the flats, the parties made an
Facts Kafco (Importers and Distributors) Ltd, a small company importing basketware, secured a major contract to supply goods to Woolworths plc. They engaged Atlas Express Ltd, a national road carrier, to handle the distribution to Woolworths’ retail outlets. An Atlas manager inspected Kafco’s goods and, based on a visual assessment, quoted a carriage rate of £1.10 per carton, anticipating that each of Atlas’s trailers could hold between 400 and 600 cartons. A contract was concluded on this basis. However, after the first collection, the Atlas driver discovered that due to their size, only 200 cartons could fit onto a trailer.
