This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the contract is in writing, but not under seal, the question of the formality with which a subsequent contract must be executed, or the means whereby it must be proved, depends upon which of the classes of contracts the original contract is. If the original contract is one which is required by law to be in writing, it can not, of course, be modified by a subsequent oral agreement, and remain a contract of that class. The question, then, is whether the subsequent oral agreement is of no effect, or whether it reduces the contract from this class to that of oral contracts. If the contract is one which is required by statute to be in writing, and this statute is passed by the legislature for the protection of the public, such a contract can not be modified or waived by subsequent oral agreement.1 A public contract which by statute must be let to the lowest bidder on advertisement for bids, can not be modified in a substantial element after it has once been let.2 The fact that the contract contains an express provision for such a modification, does not make the modification valid in such cases.3 If, however, the statute does not require the contract to be in writing, but merely requires that modifications of such contract shall be recorded, the adversary party to the contract is not prejudiced by the failure of the proper officer to record the modification. The new contract, therefore, even if not recorded, operated to modify or abrogate the earlier contract.4
Colorado. Platte Land Co. v. Hubbard, 12 Colo. App. 465, 66 Pac. 64.
Massachusetts. Munroe v. Perkins, 26 Mass. (9 Pick.) 298, 20 Am. Dec 475; Tuson v. Crosby. 172 Mass. 478, 52 N. E. 744.
New York. Fleming v. Gilbert, 3 Johns. (N. Y.) 528; Homer v. Ins. Co., 67 N. Y. 478.
Pennsylvania. Le Fevre v. Le Fevre,
4 S. & R. (Pa.) 241, 8 Am. Dec. 696; McCombs v. McKennan, 2 W. & S. (Pa.) 216, 37 Am. Dec. 505; Prouty v. Krea-mer, 199 Pa. St. 273, 49 Atl. 66.
11 Luddington v. Goodnow, 168 Maes. 223, 46 N. E. 627; Jensen v. Anderson, 50 Utah 515, 167 Pac. 811.
12 Luddington v. Goodnow, 168 Mass. 223, 46 N. E. 627.
13 Jensen v. Anderson, 50 Utah 515, 167 Pac. 811.
14 Phillips, etc., Co. v. Seymour, 91 U. S. 646, 23 L. ed. 341; J. C. Winship Co. v. Wineman, 77 111. App. 161.
If the contract is required by statute to be in writing, but the statute is not passed from motives of public policy, a subsequent oral modification or abrogation of such contract is valid if it has the elements of a valid contract. The effect of such new contract is to reduce the entire contract to an oral contract, or to a contract which is partly in writing and partly oral, or else to discharge the original contract entirely.
If the contract is one which is required by the rules of the law-merchant to be in writing,5 such as a negotiable instrument, a subsequent oral agreement modifying such contract has been held to be enforceable,6 except as to a subsequent holder in due course without notice.7