ONCA Weakens Entire Agreement Clauses In Contract Interpretation

Entire agreement clauses are often treated as a contractual safety net: once the definitive agreement is signed, prior drafts, negotiations, and understandings are meant to fall away. Courts have long recognized limited exceptions to that rule, most notably the use of surrounding circumstances as part of the factual matrix to resolve genuine ambiguity in the contract’s language. 

In Project Freeway Inc. v ABC Technologies Inc., 2025 ONCA 855, the Ontario Court of Appeal acknowledged the rule and the exceptions, but it endorsed reliance on a letter of intent as an interpretive aid even though the letter of intent was non‑binding and specifically excluded by the entire agreement clause. The court treated the letter of intent as part of the factual matrix of the agreement.