The general principle of contract variation is that parties to a contract may vary its terms by mutual agreement, provided that consideration is given and any necessary formalities are followed.
On this basis, it would not be unreasonable to expect that if a variation clause in an agreement states that the agreement can only be varied by written agreement signed by both parties, any attempted oral variation would fall short of such a test. Such clauses are commonly referred to as “anti-oral variation clauses”, the intention of which is to ensure that verbal communications cannot be treated as variations to the contract…or so the parties may have thought.
Over the past 20 years, the Courts, particularly the Court of Appeal, have considered anti-oral variation clauses on a number of occasions. In United Bank Ltd v Asif (unreported, 11 February 2000) and World Online Telecom Ltd v I-Way Ltd  EWCA Civ 413, the Court of Appeal provided two conflicting decisions. Firstly, it held that a contract containing an anti-oral variation clause could not be varied based on a verbal agreement, only to contradict that decision two years later, deciding that a contract could be varied orally despite such a clause. In World Online Telecom, Schiemann LJ undermined what many believed to be the intention behind anti-oral variation clauses, stating that the purpose “is not to prevent the recognition of oral variations, but rather, casual and unfounded allegations of such variations being made”. Whilst the obiter comments of the Court of Appeal in Globe Motors Inc, and others v TRW Lucas Varity Electric Steering Ltd and another  EWCA Civ 396 showed preference for the decision in World Online Telecomm, the law in this area was not clarified until the Court of Appeal’s decision in MWB Business Exchange Centres Ltd v Rock Advertising Ltd  EWCA Civ 553.
In MWB, the Court of Appeal held that a contract could indeed be varied by oral agreement, regardless of whether or not an anti-oral variation clause was included. It held that the freedom of contract principle enables parties to agree, vary or discharge a contract as they see fit. In his judgment, Kitchin LJ cited the words of Cordozo J, who stated back in 1919 that “those who make a contract, may unmake it [and] the clause which forbids a change, may be changed like any others”. Whilst parties have the autonomy to agree to include an anti-oral variation provision in their contract, such agreement does not preclude them from subsequently agreeing a variation to that provision, whether orally or by conduct.
In light of the MWB case, it is clear that no clause restricting variations will prevent the parties’ ability to re-negotiate their contractual arrangements. The clause, like any other clause in a contract, may be varied by the will of the parties (whether in writing, orally or through conduct) and parties should be careful about post contract oral discussions, as a variation to the terms of the contract could arise. However, this is not to say that anti-oral variation clauses are now wholly irrelevant. In fact, the Court was keen to point out the importance of the clause. Firstly, by encouraging parties to record variations in writing as a matter of best practice and second, to help to avoid casual and unfounded allegations of oral variations being made by ensuring that a suitable evidentiary bar exists for such a claim to succeed.