Can an oral agreement modify a previous written agreement?

The written agreement may contain a clause stating that the agreement cannot be modified except in writing. In that case, it would be even more difficult, if not impossible, to argue successfully that the later oral agreement changed the written agreement. There are some limited exceptions to this (for example, if a party to the original contract was induced to sign it by fraud), but you would need an attorney to review the contract and surrounding circumstances to give you a more in-depth answer.

As hinted at in the first answer, you are going to have to prove that the course of conduct of the parties proves the agreement was modified. However, if there is a provision that precludes oral modifications, you're out of luck. In your case, you may be able to prove the oral modification. You will need to show that the oral agreement was made around the same time that the life insurance policies were taken out. If a court or jury agrees that the partners would not have purchased the life insurance unless the main purpose was to provide a funding mechanism for the buy out, then you may be able to prove the modification.

Parties to an agreement are always allowed to change the terms upon mutual agreement. Oral modifications can occur - but hard to prove. Sometimes circumstances reveal a change of the agreement, or at least that one party acquiesced to the change. The written agreement is right there for all to read and understand - powerful evidence. I hope this helps. Respectfully, Steven A. Leahy www.chicagotaxteam.com