Legal Definitions - NOM CLAUSE

A NOM clause, which stands for NO-ORAL-MODIFICATION CLAUSE, is a provision commonly found in written contracts. This clause explicitly states that the contract, or any part of it, can only be changed, amended, or waived through a written agreement signed by all parties involved. Its purpose is to prevent parties from claiming that a verbal conversation or spoken agreement altered the terms of the original written contract.

Here are some examples to illustrate how a NOM clause works:

• Commercial Lease Agreement: Imagine a small business owner signs a five-year lease for a retail space. The lease agreement contains a NOM clause. Six months into the lease, the landlord verbally tells the business owner that they can pay rent late for three consecutive months without penalty due to a temporary downturn in sales. Relying on this verbal agreement, the business owner pays late. However, the landlord later sends a notice of default and demands late fees, citing the original lease terms. Because of the NOM clause, the landlord's verbal agreement is not legally binding, and the business owner is still obligated to adhere to the written payment schedule and pay the late fees.

• Software Development Contract: A tech startup hires a software development firm to build a new mobile application. Their contract includes a detailed scope of work and a NOM clause. During the project, the startup's CEO has a phone conversation with the development firm's project manager and verbally requests an additional, complex feature, which the project manager agrees to implement. The development firm spends significant time and resources building this feature. When they submit the final invoice, they include an extra charge for the additional feature. The startup refuses to pay, arguing it was part of the original agreement. Due to the NOM clause, the verbal request and agreement for the new feature are not enforceable, and the development firm may struggle to recover the cost for the additional work unless they can prove a separate written agreement or other legal grounds.

• Employment Contract: An executive signs an employment contract with a company, which specifies a certain salary, bonus structure, and termination conditions. The contract also contains a NOM clause. A year later, the company's CEO verbally promises the executive a significant increase in their annual bonus percentage for the upcoming year, acknowledging their exceptional performance. However, at the end of the year, the executive receives a bonus calculated according to the original contract's terms, not the higher percentage verbally promised. Because of the NOM clause, the CEO's verbal promise is not legally enforceable, and the executive cannot compel the company to pay the higher bonus unless the promise was put in writing and signed by both parties.