Agreement Integration Clause

April 8th, 2021

Merger and asset purchase agreements often contain, among other types of complex agreements, anti-reliance clauses. The idea behind these clauses is that a party should not be allowed to rely on an alleged submission, which is explicitly refuted by the clear terms of the treaty. This language should be included in any merger clause. Merger clauses are not always considered conclusive when it comes to whether the letter is a fully integrated agreement. Courts in some legal systems consider them to be conclusive12 or “generally conclusive”13, while other jurisdictions assert that they are inconclusive, but may be an important factor in the issue of integration on the basis of the facts14.14 The restatement (second) of the contracts states that such clauses “are likely to conclude whether the agreement is fully integrated.” 15 If the so-called prior or concomitant oral agreement is contrary to the terms of the subsequent written contract, the previous oral agreement is inadmissible, whether the written agreement is fully or partially integrated. The difficult cases – those that arise in litigation – are those where there is no contradiction between the earlier oral agreement and the subsequent written contract. Whether the previous oral agreement is admissible depends on the integration of the written contract in whole or in part. But how do the courts make this decision? The typical integration clause will be pretty much as follows: this agreement is the whole agreement between the parties regarding the purpose of this agreement and replaces all prior and simultaneous discussions and agreements.1 How do so-called merger clauses fit into all of this? Merger clauses – sometimes referred to as integration or zip-up clauses – are contractual clauses that stipulate in various ways “that there are no assurances, promises or agreements between the parties, except those contained in the writing.” 6 With regard to contracts for the sale of goods, the official comments on the Single Code of Trade (UCC) propose a modification of the natural abandonment test: the following written agreement is fully integrated if the previous oral agreement “had certainly been included in the following writing.4 , it is more difficult to see that it is fully integrated and it is more likely that the previous oral agreement will be admissible. This is in line with the UCC`s progressive corbin esque philosophy. Although the specific wording of integration clauses may vary, most languages contain some variations: integration clauses are also called “merger clauses” or “merger and integration clauses.” The laws governing integration clauses may vary from state to state, but they must be enforced with the same formalities as any other contractual clause (signed, etc.). Integration clauses are usually displayed at the beginning or end of a contract.

A draughtsman could very well accommodate the use of language that did not follow the previous ones – it happens all the time.

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