The Whole Agreement and nothing but the Agreement

Entire Agreement clauses appear in many contracts. Their main purpose is to prevent parties arguing that that pre-contractual statements amount to additional terms of the contract, or to prevent any other terms being implied into the contract, e.g. through custom and usage.

Some clauses go further in seeking to prevent any pre-contract discussions forming the basis for a claim for misrepresentation (known as a “non-reliance statement”).

The Courts have found that non-reliance statements can be enforceable, providing:

•clear words are used;
•the person to whom the representation has been made intended the person who made the representation to act upon the non-reliance statement; and
•the person who made the representation believed the non-reliance statement to be true

Therefore, if the person making the representation knows the representation is not true, it cannot rely on the non-reliance statement.

There is a further consideration: if the non-reliance statement seeks to limit or exclude liability it will be subject to a test of “reasonableness” under the Unfair Contract Terms Act. The answer will depend on factors such as:

•the relative bargaining position of the parties;
•whether the person making the representation knew or ought to have known whether the representation was true or not;
•whether it was intended that the other party would rely on the representation (and in fact it was relied on); and
•the timing of the introduction of the non-reliance statement and whether it was drawn to the other party’s attention


COMMENT: The message here is clear: do not assume that you are protected by an entire agreement clause or non-reliance statement. It will be a question of fact in each case, but clear drafting will help.