What's New in the Law

TBF Financial, LLC v. Petrenko, 2012 WL 5292826 (Wash.App.Div.1 Oct. 29, 2012)

The same court that decided the Financial Pacific Leasing v. Law Offices of David A. Sharp case below reverses a trial court summary judgment in favor of an assignee of the original lessor on grounds that might cause some concern. After a lessee entered into a lease of a copy machine with the manufacturer of the copier (or an affiliate of the manufacturer) that contained a provision prohibiting modifications unless in writing, the lessee allegedly received non-conforming equipment and then spoke over the phone with a manufacturer's representative and agreed to an oral modification of the lease terms in consideration for not rejecting the equipment. In reversing the trial court's summary judgment in favor of the assignee and remanding for trial, this appellate court refers to the no-modification-except-in-writing clause and states that “Despite this clause, it is well settled in Washington that parties to a contract may modify or abrogate contract terms in any manner they choose, regardless of provisions that prohibit modifications or abrogation except in a particular manner. Indeed, Washington courts have consistently held no-oral-modification clauses unenforceable.” Whether or not the assignee might have some recourse against its assignor (the equipment manufacturer or its affiliate), such statements by this appellate court may give financing companies pause.