Can Entire Agreement Clause Exclude Implied Term

02 Dec Can Entire Agreement Clause Exclude Implied Term

As businesses and individuals enter into agreements, they often include an entire agreement clause, which states that the written contract represents the entire agreement between the parties and that no other representations or promises, either written or oral, are included. However, the question arises as to whether an entire agreement clause can exclude implied terms.

An implied term is a term that is not expressly stated in the contract but can be reasonably inferred from the contract`s language, the parties` intentions, or the circumstances surrounding the formation of the agreement. In many cases, courts will imply terms into a contract to give effect to the parties` intentions and to ensure that the contract operates fairly.

So, does an entire agreement clause prevent the implication of terms into a contract? The answer is not straightforward, as it depends on the specific wording of the clause.

Some entire agreement clauses expressly state that they exclude all implied terms, while others do not. In cases where the clause does not exclude implied terms explicitly, courts may still imply terms if they are necessary to give effect to the contract`s purpose or to make the agreement workable.

However, where the entire agreement clause does expressly exclude implied terms, courts will generally uphold that exclusion, provided that the clause is clear and unambiguous. In such cases, the parties are deemed to have specifically chosen not to include any terms beyond those stated in the contract.

It is essential to note that not all implied terms can be excluded by an entire agreement clause. For example, terms implied by statute or common law may still apply, even if they are not expressly stated in the contract or are excluded by an entire agreement clause. Courts will not allow parties to contract out of these implied terms, as they are deemed to be fundamental and necessary for a fair and equitable agreement.

In conclusion, an entire agreement clause can exclude implied terms, but this depends on the specific language of the clause and the type of implied terms in question. Parties should ensure that their entire agreement clause is clear, unambiguous, and does not contravene any statutory or common-law provisions. By doing so, they can enter into a contract with greater certainty and confidence.