CHAPTER 4.08. Unwritten Modifications and Waivers

• Jurisdiction: United States

4.08. Unwritten Modifications and Waivers

It is well-settled law that contracts can be modified, or rights waived, orally¹²³ or by the course of conduct by the parties,¹²⁴ notwithstanding a provision in the contract that no waivers or modifications are enforceable except those in writing. The application of this general rule is very fact dependent, as the cases make clear that Delaware courts will likely not modify a written agreement without a strong factual showing. The oral contract or course of conduct must be sufficiently specific and direct as to establish the intention of the parties to modify the requirement to which they previously agreed in writing.¹²⁵ Nor do the Delaware courts appear to be reluctant to find ways around the statute of frauds in finding that such unwritten modifications have been made.¹²⁶

Although there do not appear to be any Delaware cases directly on point, courts in other jurisdictions have examined the limits to such unwritten modifications or waivers where the parties clearly intended in their written agreement to identify a covenant as not being susceptible to waiver or modification by oral contract or course of conduct.¹²⁷ Such a conclusion would seem to be consistent with the likelihood of a Delaware court to give maximum effect to the principle of freedom of contract in enforcing such an agreement.¹²⁸

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Notes:

^[123] Reeder v. Sanford School, Inc., 397 A.2d 139 (Del. Super. Ct. Jan. 16, 1979) (finding that a written contract may be modified by a subsequent oral agreement or by conduct); Hursey Porter & Associates v. Bounds, 1994 WL 762670, at *6 (Del. Super. Ct. Dec. 2, 1994). See also Williston on Contracts § 29:42 at 946 (2013). See also Homeowners Expert Services, Inc. v. Bobb, 1977 WL 5315, at *2 (Del. Ch. Mar. 15, 1976) (finding that a contract for the sale of real estate had been extended beyond the terms set forth in an express termination provision because "[t]he contract in issue was treated [after the contract had expired in accordance with its terms] by the parties exactly as it had been being carried out . . . before expiration of the written contract."). See also 913 North Market Street Partnership, L.P. v. Davis, 723 A.2d 397 (Del. 1998) (Order) ("The terms of a written contract . . . may be modified by subsequent oral agreement of the parties to forbear their rights under the agreement."); Mobile Diagnostics, Inc. v. Lindell Radiology, P.A., 1985 WL 189018, at *2 (Del. Super. Ct. Jul. 29, 1985).

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