An entire agreement clause, also known as a merger clause or integration clause, is a contractual provision that is commonly included in many different types of contracts. Its purpose is to define the scope of the agreement and to ensure that the written contract represents the complete and final understanding between the parties involved, and to indicate that the agreement between the parties is completely and “entirely” represented within that contract. Essentially, a well-written integration clause limits the evidence available to the parties should a dispute arise over the meaning of the contract.
This could be important because, during contract negotiations, the parties may propose terms, conditions, and provisions which are ultimately rejected in order to reach a compromise with the other party. The integration clause makes clear that the negotiations leading to the written contract are not the agreement.
Examples of entire agreement clauses
Standard boilerplate for an entire agreement clause
Example: “This Agreement [and any exhibits attached hereto,] is the entire, final, complete, and fully integrated agreement between the Parties with respect to the subject matter hereof. As such, the parties intend that this is the sole source of their agreement and they are not bound by any other agreements of any kind or nature.”
Standard form integration clauses are great for most commercial contracts. Whether you are selling goods or services, this clause will make it clear that everything relating to the transaction is fully reflected on the face of the contract or in its attachments. This type of clause will typically include a statement that any modifications to the contract after-the-fact must be in writing (referred to as “no oral-modification”). Include the no-oral modification language unless the type of transaction might involve time-sensitive or real-time adjustments.
Example replacing all previous agreements
Example: “This Agreement is the entire, final, complete, and fully integrated agreement between the Parties with respect to the subject matter hereof and hereby replaces any prior and contemporaneous agreements or communications between the Parties, whether written, oral, electronic or otherwise relating to its subject matter. Should there be any inconsistency or ambiguity between the terms of this agreement or agreements prior and contemporaneous, this agreement shall control.”
This language acknowledges that: 1) there might have been some prior agreements or 2) there exists contemporaneous agreements that the parties would like replaced. This clause makes clear that this agreement replaces all previous agreements.
Example “superseding” all previous agreements
Example: “This Agreement, [and any exhibits attached hereto,] is the entire, final, complete, and fully integrated agreement between the Parties with respect to the subject matter hereof and supersedes any prior agreements or communications between the Parties, whether written, oral, electronic or otherwise.”
This clause makes clear that this agreement supersedes all previous agreements. This is another somewhat standard/boilerplate clause using the term “supersede” rather than “replace.” There is no legal difference between the terms. Parties might choose one or the other depending on how they view the new contract. This is completely a matter of preference. Sometimes, if parties want to completely start from scratch, they might use the term “replace,” but if they view the new contract as more just making minor adjustments or additions to the prior, they might choose to use the term “supersede” instead. In either event, the prior agreement will become nullified and unenforceable.
Example for a specific industry (life insurance)
Example: “This Policy, including the endorsements, amendments, and any attached papers constitutes the entire contract of insurance.”
Integration clauses do not typically vary depending on the type of good or service the contract deals with. However, a simple integration clause for use in an insurance policy agreement might look something like the above.
Example that tries to supersede law (this is invalid; they cannot supersede law)*
Example: “This Agreement reflects a negotiated compromise between the Parties. As a compromise in which each Party wants to state its rights, it may be that a provision of this Agreement provides no more than is otherwise available under applicable law and, accordingly, in interpreting the intended meaning of such a provision it would be appropriate to ascribe to it no more meaning than what is otherwise provided under applicable law.”
Though parties to a contract may generally tailor their agreement as they like, a contract cannot supersede law. In other words, parties cannot contract for illegal services or acts. Ill-drafted liquidation clauses that operate as punishment clauses and wagering contracts are well-known examples. When drafters include terms that a court will not enforce, courts will apply default rules (which vary by jurisdiction and are made up of case law and legislation).
Another example is a contract that attempts to circumvent laws that are meant to protect one of the parties. For example, in a residential lease, the parties cannot agree to give the landlord an extended or unlimited amount of time to return a security deposit. The local rules must be followed, whatever they might be, such as an ordinance requiring the return of a tenant’s security deposit within 30 days. The parties cannot supersede this by allowing for longer.
This clause states that a contract cannot be interpreted to be for illegal acts or services or minimize rights that are already provided for under law.
* Clauses that attempt to supersede laws are more often found in other portions of a contract, either incorporated into more specific portions or as independent clauses.
Example of no trade usage/prior dealings
Example: “This Agreement contains the final and entire agreement of the parties and supersedes all previous and contemporaneous verbal or written negotiations, understandings, or agreements regarding the Agreement’s subject matter. The parties also intend that this complete, exclusive, and fully integrated statement of their agreement may not be supplemented or explained (interpreted) by any evidence of trade usage or course of dealing.”
Example: “No course of prior dealings or agreements between the Parties and no usage of the trade shall be relevant to supplement or explain any term used in this Agreement.”
This clause makes clear that no prior dealings, arrangements or agreements between the parties will be used to expand or explain the terms of the agreement. Use this version if your goal is to limit the other party’s ability to present evidence of prior dealings or common trade usage in order to interpret the contract. For example, if a recording artist and a producer have been working together without official contracts, but now want to memorialize their relationship in writing. Their written contract might want to exclude whatever unofficial dealings they had in the past and start fresh; it also might want to exclude the use of “common trade” understandings in the music industry in case of an interpretation dispute. A contract with this type of clause will want to be very specific with its definitions.
Non-reliance clause versus entire agreement clause
A non-reliance or anti-reliance clause indicates that a party is not relying on the other party's representations or warranties during the negotiating process. Sometimes, (even lawyers) conflate non-reliance and integration clauses, however, they are not the same. Below is an example of a clause that has both.
Example: “This Agreement contains the final and entire agreement of the parties and supersedes all previous and contemporaneous verbal or written negotiations, understandings, or agreements regarding the Agreement’s subject matter. By execution of this agreement, the parties agree that they have not relied upon any oral or written agreements, representations, warranties, statements, promises or understandings with respect to the subject matter hereof, not specifically set forth or referred to in this Agreement, and waives any rights or claims arising from any such statements, promises or representations.”
The differences are subtle, but a court will give them each different effect upon the parties depending on what they are trying to charge against the other party. An integration clause by itself will typically limit pre-contract discussions and representations, (which speaks to the parol evidence rule), and a non-reliance clause can preclude a fraud claim (unless there is fraud somewhere else in the contract itself).
Acknowledgment of Counsel
Another way to limit a party’s ability to get a contract nullified based on certain contract defenses, such as unconscionability or duress, is an acknowledgment of counsel clause. This is exactly what it sounds like! It acknowledges that each party had the assistance of a lawyer (or other expert) prior to signing a contract.
Example: “Each Party hereto has received independent legal advice regarding this Agreement and their respective rights and obligations set forth in this Agreement.”
