In the previous post we discussed the majority opinion of the UK Supreme Court on whether an agreement could be amended orally despite a "No Oral Modification" (NOM) clause. In this post we discuss the minority view and the Indian position on the subject.
The Minority View
The minority view of Lord Briggs calls for a more open possibility of an oral modification to the agreement despite the NOM clause. Lord Brigg's view was that parties could not only unbind themselves from what they had agreed, they could also unbind themselves orally of any procedural restrictions to vary the agreement. But the agreed departure from the NOM will not be "lightly inferred". The underlying policy reasons for his differing view are aptly summed up in the concluding portions of the minority opinion and are quoted here:
"31. In my view this more cautious recognition of the effect of a NOM clause, namely that it continues to bind until the parties have expressly (or by strictly necessary implication) agreed to do away with it, would give the parties most of the commercial benefits of certainty and the avoidance of abusive litigation about alleged oral variation for which its proponents contend. It would certainly do so in the present case. It would probably leave only those cases where the subject matter of the variation was to be, and was, immediately implemented, where estoppel and release of the NOM clause by necessary implication are likely to go hand in hand. While it might in theory also leave open the case where it is alleged that the parties did have the NOM clause in mind, and then agreed to do away with it orally, that seems to me to be so unlikely a story that a judge would usually have little difficulty in treating it as incredible (if denied), and therefore as presenting no obstacle to summary judgment on the contract in its unvaried form.
32. In proposing this perhaps cautious solution to the problem thrown up by this case I am comforted by the perception that it represents an incremental development of the common law which accords more closely with the conceptual analysis adopted in most other common law jurisdictions, as Lord Sumption has described. By contrast the more radical solution which he proposes would involve a clean break with something approaching an international common law consensus, unsupported by any societal or other considerations peculiar to England and Wales. There may be cases where a pressing need to modernise the common law justifies such a break, perhaps in the expectation that other common law jurisdictions will in due course follow, but this case is not, in my opinion, one of them."
The Indian Position
In India, the Supreme Court has perhaps taken a view that more-or-less accords with the minority view of Lord Briggs. In BPCL v Great Eastern Shipping, the Supreme Court held that although ordinarily silence does not mean acceptance of an offer but in certain cases when the offer is coupled by silence but the conduct leads to the inference of acceptance, such acceptance would be acceptance subsilentio and a contract would deemed to have been formed.
The acceptance subsilentio principle would equally apply to modifications "subsilentio" even in the context of a NOM clause. In Carrier Airconditioning and Refrigeration Pvt. Ltv. v. Linc Digital Systems Pvt. Ltd., the Delhi High Court had to decide whether the agreement could be extended beyond its validity period by conduct of the parties when there was a NOM clause. The court cited the BPCL case of the Supreme Court (discussed above) and held on facts that the conduct of the parties as evidenced by correspondences exchanged between them showed that they continued to bind themselves to the terms and conditions of the agreement. On that basis, the court concluded that the parties had by conduct extended the agreement despite the NOM. See also, Wire and Wireless India Pvt. Ltd. v. Information TV Pvt. Ltd. MANU/TD/0093/2011.
The Indian position is not yet as chiselled as the English position is. However, the Indian precedents are more or less in line with the minority view of the decision of the UK Supreme Court, which needs no changes or interference.
32. In proposing this perhaps cautious solution to the problem thrown up by this case I am comforted by the perception that it represents an incremental development of the common law which accords more closely with the conceptual analysis adopted in most other common law jurisdictions, as Lord Sumption has described. By contrast the more radical solution which he proposes would involve a clean break with something approaching an international common law consensus, unsupported by any societal or other considerations peculiar to England and Wales. There may be cases where a pressing need to modernise the common law justifies such a break, perhaps in the expectation that other common law jurisdictions will in due course follow, but this case is not, in my opinion, one of them."
The Indian Position
In India, the Supreme Court has perhaps taken a view that more-or-less accords with the minority view of Lord Briggs. In BPCL v Great Eastern Shipping, the Supreme Court held that although ordinarily silence does not mean acceptance of an offer but in certain cases when the offer is coupled by silence but the conduct leads to the inference of acceptance, such acceptance would be acceptance subsilentio and a contract would deemed to have been formed.
The acceptance subsilentio principle would equally apply to modifications "subsilentio" even in the context of a NOM clause. In Carrier Airconditioning and Refrigeration Pvt. Ltv. v. Linc Digital Systems Pvt. Ltd., the Delhi High Court had to decide whether the agreement could be extended beyond its validity period by conduct of the parties when there was a NOM clause. The court cited the BPCL case of the Supreme Court (discussed above) and held on facts that the conduct of the parties as evidenced by correspondences exchanged between them showed that they continued to bind themselves to the terms and conditions of the agreement. On that basis, the court concluded that the parties had by conduct extended the agreement despite the NOM. See also, Wire and Wireless India Pvt. Ltd. v. Information TV Pvt. Ltd. MANU/TD/0093/2011.
The Indian position is not yet as chiselled as the English position is. However, the Indian precedents are more or less in line with the minority view of the decision of the UK Supreme Court, which needs no changes or interference.
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