Q: My client verbally informed me on the 7th June that the day rate would have to be cut by 10% by the 20th June. I have since received a letter on the 28th June confirming the 10% rate reduction is to be applicable from the 21st June. As I received no official communication until the 28th June, can this rate be backdated? I have not received a contract amendment to confirm the new rate reduction. Should this contract amendment be in place before I can accept the rate reduction?
A: Your contract may likely include a Variation clause which commonly seeks to restrict variation of the contract only to those variations agreed in writing by the parties. The aim of such a clause is to exclude the possibility of informal oral variations being made to a contract. However, in very recent case law the Court of Appeal *found that an anti-oral variation clause in a written agreement did not preclude any variation of the agreement. The Court of Appeal referring to another case found that including an anti-oral variation clause in a contract would not prevent a subsequent variation of the contract orally, or by conduct.
You do not say that you objected to the reduction in your day rate when informed on 7th June, or that you objected to it being applicable from 21st June, hence I must assume that by your conduct you accepted the revised day rate and the date at which it would be effective. The letter, although received later than 21st June, does nonetheless confirm the change that you agreed to verbally.
In answer to your questions, the fact that a written contract amendment is not in place does not prevent the change being effective from 21st June. Further, the date from which the rate reduction would be effective would not be contingent on written confirmation (the letter) being received on or before 21st June. In the circumstances, you have already accepted the change to the contract and have accepted the rate reduction.
The answer to this question was provided by Qdos Legal Services.
*MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2016] EWCA Civ 553
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