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Modifying the “No Oral Modifications” Clause

One of my perennial favorites in contract interpretation law is the doctrine that parties can orally modify a “no oral modifications” clause. That’s right, Michigan courts will not allow contracting parties to irrevocably state in advance that their contract can never be modified except in writing.

This seemingly nonsensical legal doctrine actually makes sense upon reflection. Michigan law respects freedom of contract, so if the parties subsequently contract to modify their previous contract, and do so in a clear manner, that later act will be recognized and enforced by the court. Contracting parties are entitled to change their mind, just like everyone else. The fact that you declared “I will never eat [ice cream/chocolate/take your pick]” does not mean you cannot someday change your mind and do so. Basically, this is the same principle.

Yes, it is customary for parties to include “no oral modifications” clauses in their contracts despite this ongoing legal doctrine. We frequently insert such clauses for our clients. These clauses have some limited utility, but make no mistake: they afford no legal protection against a clear statement that a contract has been modified.

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