Nickel and Dimed: When Contract Variations Don’t Need Everyone’s Signature

A recent case in the Western Australian Supreme Court of Appeal[1], the ‘Mirabela Nickel’ case, addressed a common question for anyone dealing with multi-party contracts: does every party need to agree to a contract variation, or can some parties change their mutual obligations without the others?

The Court of Appeal held that, subject to limitations, a sub-set of parties to a multi-party agreement may be able to alter their rights and obligations under the agreement as between themselves.

This article will provide an overview of the Mirabela Nickel decision and Court of Appeal’s reasoning on when contract variations can occur without unanimous consent. This decision - and the principles it sets out - is especially relevant for anyone involved in drafting, negotiating, or managing, multi-party commercial contracts.

Facts and issues

Mirabela Nickel Ltd and certain related entities (Sellers) entered into an Asset Sale Agreement (Sale Agreement) with Mining Standards International Pty Ltd (Buyer) and a third party, which is referred to throughout the judgment as Brazil Co. The Sale Agreement included a key condition: the Buyer had to secure finance by a certain date (Finance Condition).

A dispute arose about whether the Sellers and Buyer could agree to extend the deadline for this Finance Condition without Brazil Co’s consent.

This scenario is not uncommon in commercial transactions, where parties may wish to adjust timelines or obligations to reflect changing circumstances, but not all parties are available or willing to agree.

The relevant questions for the Court included the following:

• could the Sellers and the Buyer, without Brazil Co’s agreement, validly vary the date for satisfaction of the Finance Condition?
• did the absence of Brazil Co’s consent render the variation ineffective?
• more broadly, does a variation to a multi-party contract require the agreement of all parties?

The Court's decision

The Court of Appeal held that if a contract change only affects the parties who agree to it - and doesn’t impact the rights and obligations of others - then those parties can make the change without everyone’s consent.  In this case, only the Sellers and Buyer were affected by the new finance deadline, so the change was valid even though Brazil Co did not agree.

The Court relied on established authorities[2], to confirm that unless the contract or the nature of the variation requires universal consent, a partial variation is possible. The Court also noted that some contracts or variations may require unanimous consent, depending on their structure and purpose, but this was not such a case.

This decision reflects a pragmatic approach, recognising that commercial arrangements must be flexible enough to accommodate changes without unnecessary procedural hurdles, provided the interests of all parties are protected.

Key takeaways

The Court of Appeal’s decision provides welcome clarity for practitioners and advisers dealing with multi-party contracts.  It confirms that, unless the contract or the nature of the variation requires otherwise, a sub-set of parties can agree to vary their mutual rights and obligations without the need for all parties to sign-off.

However, care must be taken to ensure that such a variation does not affect the rights or obligations of non-consenting parties, as this could render the variation ineffective or expose the parties to claims.

This case highlights the importance of:

• Checking the variation clause: Does the contract require all parties to agree to any change, or can some parties amend their mutual obligations? Is there a process for notifying non-consenting parties?
• Assessing the impact: Will the change affect only the consenting parties, or could it have indirect effects on others?
• Communicating with all parties:Even where unanimous consent is not required, it is generally good practice to inform all parties of proposed changes.
• Documenting the change: A clear, written record of the variation, signed by the relevant parties, is essential. This should specify the nature of the change, the parties involved, and confirm that the rights of non-consenting parties are unaffected.

Conclusion

The Mirabela Nickel decision gives parties to multi-party contracts greater flexibility - they can agree to changes without waiting for every signature, as long as non-consenting parties’ rights aren’t affected. But with this flexibility comes responsibility: changes must be clearly documented, their impact understood, and the rights of others respected. Poorly managed amendments could be ineffective or lead to legal disputes.

Ultimately, while Mirabela Nickel is a valuable guide, every contract and situation is unique. Careful analysis and clear documentation are critical, and legal advice should be obtained to avoid pitfalls and ensure amendments are valid if challenged.

More Cleardocs information on related topics

• Do Unitholders Have Fiduciary Duties to One Another? The Court Says No
• Deeds of Variation And Deeds of Rectification: What Is The Difference And Which Should I Use?

Order related document packages

• Company Registration
• Shareholders Agreement
• Unit Trust

[1] Mirabela Nickel Ltd (in Liquidation) (Receivers and Managers Appointed) v Mining Standards International Pty Ltd [2025] WASCA 82.

[2] These authorities included GB Energy Ltd v Protean Power Pty Ltd [2009] WASC 333 and Raja v Rubin [2000] Ch 274, Court of Appeal (England and Wales).