General Issues

A verbal agreement in respect of a written contract

By 07/02/2019 No Comments
Verbal Agreement of two people shaking hands at a table

Is a verbal agreement in respect of a written contract which includes a non-variation clause binding?

A non-variation clause is present in most written agreements, from leases to sales. The purpose of the clause is to ensure any amendment to the agreement will only be valid if it is in writing and signed by the contracting parties. The clause is important as it prevents disputes arising from any discussions or representations made outside the written document.

The validity of the non-variation clause was confirmed in the Appellate Division decision in SA Sentrale Ko-op Graanmaatskappy Bpk v Shifren en Andere 1964 (4) SA 760 (A) and has since been referred to as the Shifren principle.

The Shifren principle stipulates that parties should be free to conclude any agreement, even if the agreement limits their right to conclude a verbal agreement in future.

The court further held that parties who agree to limit their rights to conclude oral agreements should be bound to the terms of the contract they have signed.

Under the new Constitution dispensation the Shifren principle is presumed to apply unless it can be demonstrated that public policy demands otherwise.

Ian Mc Laren

Ian Mc Laren

Ian McLaren BA LLB (WITS) General Educated St Johns College, Houghton. BA LLB University of the Witwatersrand 1984 Founded McLarens September 1986. Right of Appearance High Court, October 1996. Expertise Litigation, Labour Law, Commercial Law, Family Law, Pension and Provident Funds, Customs and Excise, Wills, Deceased Estates, Trusts, Commercial Agreements, Reviewing and Drafting Government Legislation, Information Technology. Committees/ Trusts Law Society of South Africa Information Technology Committee. Trustee Verney College Educational Trust Other Transvaal Provincial colours for Practical Shooting. Third degree Black Belt JKS Karate. Photographer and motor cyclist Lectured for Continuing Legal Education on Information Technology issues.

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