Oral Modifications to Written Contracts: A Lesser-known Breach of Contract Rule

Our Chicago breach of contract attorneys understand that the legal nature of contractual agreements may sometimes appear confusing or contradictory, so we are committed to analyzing each breach of contract case individually and providing our clients with personalized counsel.

breach of contract suit most commonly arises when one party fails to uphold their contractual duties. In most cases, the court will examine the arguments of the plaintiff and the defense within the boundaries of the established written agreement, arriving at a verdict through a reinforcement of the contract’s provisions. One important rule that many clients and other attorneys are not aware of though is that oral modifications can trump the guidelines of a written agreement, even if the contract contains a “no oral modification” clause.

In Tadros v. Kuzmak (1995), Musa Tardos was sued for the non-payment of $105,777.65 on a commercial real estate property by Walter Kuzmak, Joseph Walinchus and the First National Bank of Evergreen Park. The court found that the sellers’ breach of oral modification of agreement concerning tax escrow relieved Tardos of any obligation to make monthly tax payments and provided for forfeiture of the property. In other words, since the sellers failed to uphold a part of an oral amendment, Tardos was able to exit the contract and avoid the non-payment charges. The existence of a “no oral modification” in turn carries no legal weight and can actually be misleading rather than protective.

The implication behind this legal precedent is that a strict understanding of the parties actions within the legal boundaries of a contract may sometimes be short-sighted. Oral amendments and the legal mechanics of a contract are just as the literal interpretation of the agreement. In Caulfield v. Packer Engineering (2015), the same precept was applied to a employment agreement contract as the court explained that, “the terms of a written contract can be modified by a subsequent oral agreement even though the contract precludes oral modifications.”

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Our Chicago breach of contract attorneys have decades of combined experience with handling many different business litigation and corporate dispute matters throughout Illinois. To schedule a consultation with one of our lawyers today, please contact us online or give us a call.

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