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Mistake in Contract and “no oral” modification term

Baycourt Chambers successfully represented Bahamas Telecommunications Company in a contractual dispute with KT Mactech Limited.

The parties had a written contract that contained an obvious error. The Court found on the evidence that the parties acted on the “correct terms” and that KT Mactech was estopped to rely on the error in the contract.

The Court was not persuaded by the no oral modification clause argument . In a clear and concise Ruling, Justice Ian Winder found in favour of BTC.

The Court addressed the principles set out in Rock Advertising Limited v MWB Business Exchange Centres Limited [2018] UKSC 24, the leading authority of the UK Supreme Court on no oral modification clauses.

Justice Winder ruled –

A court will not sanction a contract as in this case, where there is no consensus ad idem. The plaintiff cannot be permitted to take advantage of an error which he is or ought to be conscious of. In this case I am satisfied that the plaintiff was aware of the error. In any event, on principles of estoppel, it would be inappropriate to permit the plaintiff to benefit from the error, where, for almost half of the life of the contract, the contract was performed in accordance with the “mistaken” terms, without demur by the plaintiff.

I am not deterred in my view by the dicta expressed in the case of RockAdvertising In that case,the question for consideration was the efficacy of the parties agreeing to modify the terms of the agreement. Here, however, notwithstanding the clauses against oral modification, a clear mistake was made in the contractual document. In this case, on my finding, the parties never intended to make the contract on the terms which was executed, not that they agreed to vary it. Even in the case of Rock Advertising Limited, Lord Sumption acknowledged that the existence of these clauses were not undefendable and equitable principles would still have the last word.

KT Mactech Ltd. v. BTC 863 of 2017


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