By Mark G. Matuschak and Kenneth H. Slade with contributions from summer associate Jennifer Hickey
Originally published on July 24, 2002
Written contracts may be modified by subsequent oral agreements or conduct, even when they include clauses purporting to prohibit such modifications. A recent case in Florida,
MHW and Bacardi U.S.A. v. Gallo Wine Distributors, serves as a dramatic reminder that subsequent party conduct may even revive an earlier agreement that was expressly superseded by such a contractual clause.
MHW and Bacardi U.S.A. involved a liquor distribution arrangement between Bacardi U.S.A. and its New York distributor, Premier Wines & Spirits. In 1998, Premier agreed to invest approximately $5.1 million in Bacardi over a six-year period to help Bacardi finance the purchase of five additional brands. According to Premier, Bacardi orally promised in exchange to continue using Premier as its New York distributor for ten years.
