Entire agreement clause

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A clause designed to buttress the time-honoured parol evidence rule, that if it is clear you meant to entirely reduce your agreement to writing, once you have done so the agreement, and no other extraneous evidence, will be the tribunal’s only guide to divining its intention.

A “classic” ebntire agreement clause contains the following components of flannelry:

• A statement that the document (and, ahh, anncillary documents it refers to — you can see the unfolding problem here right?), represents the totality of the bargain.
• A disclaimer of all prior representations, intimations and innuendos that might otherwise have induced entry into the contract.
• An exclusion of liability for any such misrepresentations, innuendos etc (for the sort of chicken licken that might not trust its own disclaimer, for the avoidance of doubt.
• If you are really minded to go to town, a restriction limiting a party's remedies for misrepresentations — which you have just comprehensively disclaimed, remember — to contractual remedies only.
• A final, emotional concession, to prove that your heart is not entirely made of stone, allowing that this clause won’t excuse your outright fraud. Not, of course, that any contractual term could immunise a party who seeks to rely on it from its own fraud.

Reduces a certain amount of uncertainty, certainly, but at what cost?

Also a favourite “in your face” move of the kind of pedant you will inevitably encounter in a derivatives negotiation. Some been known to insert an entire agreement clause into an amendment agreement. No, you clot, by utter definition an amendment isn’t the entire agreement.

But it creates a Mobius loop. For either your written agreement, on its face and by its own terms and in the parties’ shared expectation, is the final definitive record of your whole agreement “on the subject matter it purports to address” — now there’s some wieselspiele for the times — in which case, making a statement to that effect is superfluous, or it is not. Nothing you can write in the agreement will change that.

Here are some practical consequences you might not have thought of

• Would an entire agreement clause prevent a court implying terms to give a contract business efficacy? No, said the Court of Appeal, rejecting the fatuous claim of a landlord in Hipwell v Szurek [2018] EWCA(Civ) 674 that an entire agreement clause in a lease contract that didn’t mention electrical wiring meant it wasn’t responsible for the maintenance and repair of the wiring, which proceeded to administer the tenant and customers of her cafe periodic electric shocks.

See also

• Good client briefing on the topic from Ashurst here.
• In your face
• Entire Agreement - ISDA Master Agreement
• Entire agreement - 2010 GMSLA
• Entire Agreement; Severability - Global Master Repurchase Agreement