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Gilbert Steel Ltd. v. University Construction Ltd. [1973] 3 O.R. 268


P to supply steel to D. Entered another contract with price increase. During contract, price of steel increased. P and D orally decided to a increase in price


Was the oral agreement legally binding, or does it fail for want of consideration?


Variation of the original contract will be judged objectively by the parties’ intentions, and new consideration is required to validate the variation
**Must be some indication that the parties actually intended to rescind the old agreement and enter into a new agreement


Oral variation of written agreement was an implied rescission of the written contract and the creation of a new one.
**The consideration for this new oral agreement was the mutual agreement to abandon the old contract


Oral agreement void for want of consideration


  1. Fiat Justitia Ruat Caelum 32

    An oral agreement could throw out or nullify a written agreement, but the written agreement cannot be amended by an oral agreement.

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