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The clauses of a contract determine its strength and scope. They are the contractual terms and ultimately bind each party to the agreement. If there is a dispute over a clause, a court can decide to enforce the clause. Alternatively, it can require the breaching party to pay damages for any loss that the other party suffers. An entire agreement clause is a common clause used in contracts. This article will explain what an entire agreement clause is and when you should include it in your contract.

What Is an Entire Agreement Clause?

An entire agreement clause explains that the given contract represents the whole agreement between the parties. This means that any other communications or agreements between parties are not legally binding. Consequently, if a party tries to enforce the contract, a court will only take into account the terms contained within the contract. Ultimately, an entire agreement clause is useful because parties to the contract may say things in previous communications that they do not want to form part of the final agreement. 

When Should I Include an Entire Agreement Clause in My Contract?

You should include an entire agreement clause in agreements that you have negotiated through various mediums. Additionally, you should consider including one if the contract took a significant amount of time to come to fruition.

The various mediums used during contractual negotiations could involve:

  • email;
  • texts;
  • phone calls; and
  • social media.

Therefore, including an entire agreement clause will mean that anything agreed in the communications used during negotiations is excluded from the contract.

What Terms Are Not Excluded by an Entire Agreement Clause?

An entire agreement clause will not exclude terms that are guaranteed by law. For example, if you are negotiating a consumer contract, then you cannot use an entire agreement clause to exclude relevant terms from the Consumer Guarantees Act. This will remain the case even if your contracting party agrees to a contract that excludes terms guaranteed by legislation.

However, it is important to remember that some agreements may contain a variation clause. A variation clause allows changes to the agreement in specific circumstances. The clause will detail such instances. This means that an agreement could include things parties discussed in negotiations, even if there is an entire agreement clause. As long as both sides agree, they can also vary their agreement under the variation clause. 

How Do I Recognise an Entire Agreement Clause?

An entire agreement clause will contain a phrase that indicates the contract is the only legally binding part of any agreement concluded.

For example, the clause may state: “This Agreement contains the entire understanding between the Parties, and supersedes all previous discussions, communications, negotiations, understandings, representations, warranties, commitments and agreements, in respect of its subject matter.” 

Key Takeaways

Contractual arrangements are an important part of any business as they build trust between different commercial partners. Specifically, they build trust because they are legally enforceable. This means that both parties to the contract are able to use the courts to enforce the agreement against the other. 

One way to prevent contractual disputes is to include an entire agreement clause. An entire agreement clause declares that the present contract is the extent of the agreement. This means that no other discussions or communications outside of the contract will form part of the agreement. Indeed, this includes any emails or texts communicated during the negotiation phase. However, there are clauses that are automatically included in a contract through statute, and you cannot contract out of these.

For legal assistance with managing your contracts, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Do I have to include an entire agreement clause?

No, there is no legal requirement to include an entire agreement clause but they can be useful when signing agreements that have taken a long time to settle.

Does there have to be a specific about which communications are not part of the agreement when including an entire agreement clause?

You do not have to specify the communications that you wish to exclude from the agreement. Indeed, it is sufficient to state that the current agreement is the extent of any legally binding contract. 

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