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ARTICLE · 18 JANUARY 2012

Entire agreement clauses in construction contracts - Implied terms and misrepresentations

The rationale underlying entire agreement clauses is to consolidate the bargain of the parties.

AustraliaCorporate/Commercial Law

In brief - Entire agreement clause not intended as an exclusionary provision

The rationale underlying entire agreement clauses is to consolidate the bargain of the parties. It is not to act as an exclusionary provision carving out things such as misrepresentations and implied terms.

Purpose of entire agreement clause

"Entire agreement" clauses are invariably included in construction contracts. Their purpose, colourfully highlighted in a 2000 English decision (Inntrepreneur Pub Co v East Crown Limited [2000] 2 Lloyd's Rep 611 at 614), is to prevent a party "threshing the undergrowth and finding in the course of negotiations some (chance) remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim to the existence of a collateral warranty".

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