Parties concluding a written contract may wish to ensure that any

modification or termination by agreement will also be in writing or

otherwise in a particular form and to this end include a special clause

in the contract (e.g. “Any modification of this Contract may be made

only by a writing signed by both Parties"; "Alterations to the above indicated

Time-schedule must be confirmed in writing by the Engineer’s representative on site”).

This article states that as a rule such a clause renders ineffective

any modification or termination by agreement not in the particular

form required.

I l l u s t r a t i o n

1. Contractor A contracts with purchaser B for the construction

of a building. The contract provides that any modification to the

work schedule must be in writing and the document must be signed

by both parties. In the course of construction, A sends B an e-mail

asking B to agree to the extension of a particular deadline. B

accepts by return of e-mail. The modification is ineffective since

there is no single document bearing both parties’ signature.

Yet there is an exception to the general rule. In application of the

general principle prohibiting inconsistent behaviour (see Art. 1.8), this

article specifies that a party may be precluded by its conduct from

invoking the clause requiring any modification or termination to be in

a particular form to the extent that the other party has reasonably acted

in reliance on that conduct.

I l l u s t r a t i o n

2. A, a contractor, contracts with B, a school board, for the

construction of a new school building. The contract provides that

the second floor of the building is to have sufficient bearing

capacity to support the school library. Notwithstanding a “no oral

modification” clause in the same contract, the parties orally agree

that the second floor of the building should be of non-bearing

construction. A completes construction according to the

modification, and B, who has observed the progress of the

construction without making any objections, only at this point

objects to how the second floor has been constructed. A court may

decide that B is not entitled to invoke the “no oral modification”

clause as A reasonably relied on the oral modification, and is

therefore not liable for non-performance.