Whole Agreement Clause

This agreement constitutes the entire agreement between the contracting parties and replaces all prior agreements, agreements, negotiations and discussions, both written and public. There are no guarantees, alliances, conditions or other agreements, explicit or implied, of security, legal or otherwise, between the parties in relation to the purpose of this agreement, unless it is expressly included in it. The general rule is that the entire agreement clause concludes the parties to conduct all oral evidence to prove the terms of the contract1, since the parties expressed by the entire agreement clause their intention that the document contains all the terms of their agreement2 and this supports the rule of evidence parol under Section 92 of the Indian Evidence Act , 1872 (“IEA”).3 There are, however, some exceptions to this general rule. If the contract does not contain all the conditions between the parties and the contract remains silent on the other conditions, the parties may present oral evidence of their negotiations to interpret or complete the contract4. However, these other clauses must not be inconsistent with the written contract.5 In addition, extrinsic evidence may give rise to contractual ambiguities, but not in cases where the terms of the contract are clear.6 The purpose of a full contractual clause is to clarify that the document in which it appears (and all other documents cited) constitutes the whole agreement between the parties. This helps to ensure contractual security: the parties know that the agreement is limited to the four corners of the document. It may also limit a party`s liability for misrepresentations (losses caused by statements prior to the conclusion of the contract) and other potential claims. The general approach of the courts was to interpret entire contractual clauses as precisely as they do. As confirmed by the Court of Appeal in AXA Sun Life Services Plc/Campbell Martin Ltd. e.a., a clear statement is required if a party actually wishes to exclude liability from either representation. In addition, the parties could usefully verify whether there is relevant pre-contract conduct between the parties or a use that could be excluded by a full contractual clause.

Consider the scenario in which a long-term contract is renewed and the parties sign an “modified” or “replicated” agreement. If, during the performance of this contract, a recognized practice does not comply with its strict conditions (e.g. B billing after 30 days, if the contract says 14 days), but the amended contract is not amended to reflect this and remains in its original form, the parties have probably excluded their right to avail themselves of this prior conduct. Issuing invoices after 30 days would now constitute a breach of contract under the revised new agreement. Contracting parties must carefully consider the inclusion of a full contractual clause, both when entering into new contracts and when amending or amending existing contracts. The general rule is that a full agreement cannot exclude terms that are implied by custom use or use. This is also supported by the basement (5) of Section 92 of the IEA. A commercial use or habit is so well known and well understood with respect to the business that the parties are supposed to have their contract with the tacit reference and intend to be regulated by it, even if a party does not actually know the habit or use10.

Tjip de Jong

Kijk ook eens naar