Entire contract terms must also be appropriate under the Unfair Contract Terms Act 1977. If both parties are commercially available companies and the contract is concluded in a commercial context, it is unlikely that a full contractual clause excluding liability for pre-contractual representation is inappropriate. This may be the case even if one of the parties is much larger than the other, provided that the smaller party is accustomed to dealing with such agreements. Problems often arise when disagreements arise regarding the meaning and effect of such contracts or agreements, and when a party tries to ask outside the terms of the contract to support a lawsuit, defense, or argument. 4. Previous agreements and confiscation by agreement – Finally, when concluding a contract, the parties must check whether agreements were concluded before the contract that should be included in such a contract. If this is the case, this should be done by explicitly referring to this agreement and including it in the new contract. If this has been done correctly, a full agreement clause will not prevent it. Many forms of contracts, especially commercial contracts, typically contain a variety of so-called “boilerplate” clauses (i.e., clauses with standard formulations that are commonly used). One type of standard clause that is often included in contracts – and often plays an important role when contracts that go wrong are negotiated – is the “Entire Agreement” clause. In the case of NF Football Investments Ltd v. NFCC Group Holdings Limited, the High Court held that the entire contractual clause, when interpreted as part of the overall agreement, precludes a claim for damages for misrepresentation, although there is no express exclusion to that effect.
If there are already contracts that must remain in force at the time of the new agreement, their use can be very dangerous. Conclusions Although a full agreement clause is a useful and very common “boilerplate” provision, it is not necessarily a complete answer to exclude anything outside of the written document itself. A full agreement clause does not serve this purpose unless it has been carefully formulated with the intention of excluding such other matters, and even then it may be rescinded. The parties are advised to think carefully about what they want to include or exclude in their contract. In certain circumstances, there may be pre-contractual exchanges, representations or statements on which a party wishes to rely. In this case, it may be more advantageous to refrain from including a determination. If the clause is inserted, all pre-contractual statements on which that party may rely should be included in the contract itself. Such a clause constitutes a binding agreement between the parties that the full terms of the contract are found in the document containing the clause and not elsewhere and that, therefore, any commitments or assurances made during the negotiations (which, in the absence of such a clause, could become effective as collateral guarantees) do not have the force of contract, unless they are reflected and implemented in this document. Recent case law has shown that it is important to carefully consider the effect of entire contractual clauses when they are included in commercial contracts. In particular, if a party wishes to exclude liability for pre-contractual representations, the contract must expressly exclude such liability, although liability for fraudulent pre-contractual representations can never be excluded. The Court of Appeal upheld the decision at first instance and confirmed that the non-confidence clause was an exclusion clause subject to section 3.
The court`s approach was very simple: Would the landlord have been held liable for misrepresentation under the Misrepresentation Act without the provision? The answer was yes. At first glance, therefore, the clause excluded liability, and there was no evidence to suggest otherwise. The fact that the clause was considered a contractual forfeiture (which prevents the tenant from claiming that the representation was made because the tenant had agreed that nothing that had been said by the landlord should be considered insurance) made no difference. Section 3 continues to apply. The adequacy criterion was therefore applied. The landlord argued that the clause was appropriate because the parties were legally represented, had the same bargaining power, and the parties had not entered into contracts under the landlord`s usual terms. The trial judge accepted these facts, but did not find them conclusive. In deciding that the clause was inappropriate, the trial judge recognized the importance of pre-contractual applications in the area of transfer; If the landlord were entitled to exclude any liability for these representations, the important function of responding to pre-contractual requests would become worthless. The Court of Appeal upheld its decision. In addition, case law has set four specific restrictions for entire contractual clauses: An example of a global contractual clause would be as follows: The final contract contained a full agreement clause. Shoreline argued that this clause prevented Mears from relying on the pre-contractual agreement.
However, Justice Akenhead noted that “the clause in the entire agreement does not exclude or restrict confidence in established and effective forfeiture, either because of its express wording or interpretation.” It was concluded that the parties shared a fact accepted prior to the commencement of the contract and that they had relied on that assumption for a significant period of time, so it would be unfair to allow Shoreline to apply the terms of the contract in order not to meet its obligations under the pre-contractual agreement […].
