Before signing a business contract, you want to fully understand the rights and obligations of both parties. Moreover, you want to have every assurance that the terms of the agreement are ironclad and legally binding. As such, you may believe that every point in a contract is enforceable. However, what happens if the contract in question is not the first set of terms agreed to by the parties?
It may seem only logical that a new agreement would negate prior commitments. But when it comes to contracts, it is critical that all terms be spelled out with exactitude. Therefore, when you enter what you want to be a final agreement, it is a good idea to include what is known as an “entire agreement clause,” which is also called a “merger clause” or an “integration clause.”
Properly written, an entire agreement clause should spell out in no uncertain terms that the provisions contained in the current contract supersede provisions in prior written or oral commitments.
The purpose of this clause is to prevent a party from claiming that terms or promises exist other than those included in the contract. Consequently, prior agreements should be addressed in the new contract. And because the entire agreement clause is intended to cover the full scope of the contract, it should be placed at the contract’s end.
Examining the terms of a contract is a detail-oriented task. But this can be to your advantage if you are familiar with all the relevant clauses that can be included to offer you as much protection as possible.
Having an experienced contract litigation attorney analyze your contract is a good step to take if you want to make sure you are getting all the conditions you want in an agreement. And should the other party later attempt to breach the contract, the attorney can represent your interests in settling the dispute.
