It is a standard practice that lawyers will insert an “entire agreement clause” (see below) in a contract. This is such a common clause that many people overlook it as “just another standard contract term”. In fact, this is actually a very important clause which can affect your rights in bringing a breach of contract or misrepresentation action in the future.

Entire Agreement

1.1       This Contract and the documents referred to in it constitute the whole agreement and understanding of the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter of this Contract.

1.2       Each party acknowledges that, in entering into this Contract, it has not relied on any statement, representation, assurance or warranty (whether made negligently or innocently) other than those expressly set out in this Contract or the documents referred to in it.

So… Why do we need an ‘Entire Agreement’ Clause?

This clause is important to declare that the contract represents the final and complete deal between the parties, to prevent any uncertainty or ambiguity about the status of earlier understandings or agreements during negotiation period.

 “The contract constitutes the whole of the agreement and understanding between the parties and supersedes any previous agreement or understanding.”

This sentence clearly shows that the contract (and any documents referred in it) represents the final deal. So, after you read the draft contract and if it does not reflect the final position you desire, do not sign it until amendments are made. This is because after you sign a contract with an entire agreement clause, any previous oral agreements not mentioned in the contract would be dismissed.

“Each party acknowledges that, in entering into this Contract, it has not relied on any statement, representation, assurance or warranty other than those expressly set out in this Contract or the documents referred to in it.”

This clause seeks to exclude liability for misrepresentation by way of a “non-reliance statement”, making it clear that the parties have not relied on any representations or statements aside from those set out in the agreement. Therefore, do make sure that any external promises or documents which you intend to be rely upon are expressly provided in the contract to protect your best interest.