Vasant (t/a MK Vasant & Associates) & Ors v NHS Commissioning Board

A written contractual variation is effective where it satisfies an applicable no-oral-modification clause and clearly identifies the contractual change, even if it does not restate every operational term. An entire-agreement clause ordinarily defines the agreement at the time of contracting and does not prevent later variation in accordance with the contract’s variation provisions. The court must construe the variation using the language, relevant background and commercial context. Where the variation incorporates a service into an existing contractual framework, operational arrangements may continue by reference to existing terms while governance, dispute resolution and termination are governed by the amended contract. Policy concerns cannot override the contractual rights thereby created.

The claimants were dental practices providing intermediate minor oral surgery services to NHS England. The services had initially been provided under a fixed-term IMOS contract. In April 2009 the parties signed a GDS Contract Variation Agreement Form amending clause 168 of the GDS Contract to provide for an intermediate minor oral surgery service.

NHS England later sought to terminate the IMOS arrangements on notice and argued that the variation was ineffective because it did not specify all terms governing payment, invoicing, referrals and service delivery. The claimants sought declarations that the IMOS services fell within the GDS Contract and could not be terminated on one month’s notice. They advanced reliance-based estoppel in the alternative.

1. The claimants succeeded. The court declared that the GDS Contract, as amended by the variation form, governed both mandatory general dental services and IMOS services. The alternative estoppel claim therefore did not require determination.
2. The variation form changed clause 168 from “Reserved” to provision of an advanced mandatory service in the form of an IMOS service. It was in writing and signed by the PCT and the contractor. It therefore satisfied the no-oral-modification requirement in clause 287 of the GDS Contract.
3. The entire-agreement clause in clause 366 did not require all contractual arrangements to remain within the original document. Applying MWB Business Exchange Ltd v Rock Advertising Ltd [2018] UKSC 24, an entire-agreement clause principally addresses prior discussions and agreements. It does not regulate subsequent variations, which are governed by the contractual variation provisions.
4. The variation was sufficiently certain. The parties intended that the practical operation of IMOS services, including payment, invoicing and referral arrangements, would remain as before, while the GDS Contract governed other matters, including clinical governance, quality assurance, insurance, complaints, dispute resolution and termination. The use of Part 10, concerning further services, avoided the need to integrate IMOS services into the UDA and Schedule 4 mechanisms applicable to Part 9 additional services.
5. The court applied the ordinary principles of contractual construction stated in Rainy Sky SA v Kookmin Bank [2011] UKSC 50 and Arnold v Britton [2015] UKSC 36. The words used, read in their commercial context, showed that the parties intended the GDS Contract’s termination provisions to apply. NHS England therefore had no general right to terminate the IMOS services on one month’s notice. Its policy concerns about procurement and value for money could not displace its contractual obligations.