An Entire Agreement Clause Is Not A Complete Bar To A Fraudulent Misrepresentation Defence

An entire agreement clause clarifies that the document in which it appears (and any other documents specified) constitutes the whole agreement between the parties. This helps ensure contractual certainty: the parties know that the deal is confined to the four corners of the document.

Generally, when a contract contains an "entire agreement" clause, a party cannot rely on prior representations to avoid its obligations under the agreement. However, in a recent decision, the Ontario Court of Appeal maintained that this does not hold true regarding alleged fraudulent misrepresentations.

In 10443204 Canada Inc. v. 2701835 Ontario Inc.,2022 ONCA 745, the Court of Appeal overturned a summary judgment decision on the basis that an entire agreement clause in an agreement of purchase and sale will not preclude a defence of fraudulent misrepresentation. See Daniel Waldman's previous article on the motion judge's decision.