Entire agreement clause meaning

Any resolution of a dispute should be set out in a signed, enforceable written agreement that precisely records the parties’ terms. This reduces the prospect of later misunderstanding and allows a party to commence proceedings if the other side does not comply. As the agreement is a contract, contract law governs its drafting and interpretation, so it must be written with clarity. This Checklist highlights the key considerations of particular importance to construction disputes. For illustrative clauses and deeper analysis (including drafting notes), see Precedent: Settlement agreement for construction dispute (long form). Ensure that settlement negotiations are conducted on a without prejudice basis State expressly that settlement discussions are conducted on a ‘without prejudice’ basis so that, if talks fail, any proposed concessions cannot be relied upon by the other party in subsequent legal proceedings. Do not assume that terms such as ‘confidential’ or ‘off the record’ offer comparable protection. For further detail, see Practice Note: Without prejudice communications. Who is entering into the settlement?...

This Checklist applies to a property disposal and considers what must be revealed to a purchaser and the manner of disclosure by deducing title, preparing the contract and answering preliminary enquiries. It addresses both the content of disclosure and the way it is provided. What must the seller disclose? Nature of seller’s title Unless agreed otherwise, a purchaser may proceed on the basis that the property is freehold and free from encumbrances. In practice, that presumption is seldom relied upon, as title will be deduced to the buyer and the contract will set out the property particulars together with any incumbrances (see Drafting the contract below). However, this starting point is rarely relied upon in practice. Rather, evidence of title is produced and the paperwork captures relevant particulars and burdens. Latent defects Treating the property as freehold and unburdened by incumbrances places the seller under a duty to disclose latent defects in the title to the buyer. A latent defect is one that would not...

This Checklist This Checklist outlines the principal issues to address, and supplies practical guidance, when drafting and bargaining over entire agreement clauses in a business-to-business (B2B) contract. It reviews the impact of common law and statutory controls, including the Unfair Contract Terms Act 1977 (UCTA 1977) and the Misrepresentation Act 1967 (MA 1967). The purpose of an entire agreement clause is to give the parties assurance that the whole of their agreement is set out in writing and to ensure that any pre-contractual representations, statements, arrangements or discussions do not form part of the contract they are entering into. Statements are often made by one party to the other during pre-contract negotiations (for example as part of a sales process). Disputes may arise over whether, or which, statements were intended to be part of the contract or might otherwise give rise to remedies. Depending on the facts, a pre-contractual statement can take legal effect (and lead to remedies). For more information, see Practice Note: Pre-contractual representations and statements. An...

Staveley v Restis [2024] EWHC 670 (Ch) What are the practical implications of this case? This decision offers a timely illustration of the court’s approach to applications to set aside a statutory demand. Although it is enough to establish a dispute on substantial grounds, that does not mean any merely arguable point will do. Rather, as this ruling shows, the evidential material put forward to support the alleged dispute will be tested with care. In the face of contemporaneous records, the court may find that account inherently unlikely. The judgment also underlines that, while arbitration clauses are generally upheld in insolvency proceedings, a respondent may contend that the clause no longer subsists. A later agreement revising lending terms can, where it includes an entire agreement provision, achieve that result. What was the background? The application related to a statutory demand seeking £36,841,287.12, being a £10m loan together with accrued interest. The advance was made in 2008 to the applicant’s companies (the ‘companies’) or, it was alternatively...

Balfour Beatty Regional Construction Ltd v Van Elle Ltd [2021] EWHC 794 (TCC) What are the practical implications of this case? This ruling illustrates the problems that can emerge when a sub-contractor (or indeed a consultant or surveyor) issues its own terms and conditions with an initial quotation for works or services, and the later agreement does not contain an effective entire agreement clause and/or leaves scope to argue that the contractual scope does not cover every aspect of the works actually undertaken on the project. The judge found—by reference to the wording of an LOI entered into after the original quotation, the terms of the sub-contract when concluded, and the parties’ conduct in invoicing—that there was a single contract. Nonetheless, practitioners should ensure inclusion of a clear entire agreement clause that expressly states previous agreements are superseded (see Practice Note: Entire agreement clauses). Alternatively, if particular elements of the works are intended to be excluded, that should be made explicit in the scope description...

In this issue: Sustainable finance and ESG weekly round-up Lending On-demand bonds Aviation finance Sustainable finance Debt capital markets Regulation for banking lawyers Technology in banking and finance transactions Sanctions Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG weekly round-up For this week’s highlights on Sustainable finance and ESG, consult Sustainable finance and ESG weekly round-up—7 November 2024. Lending Murfet and another v Property Lending LLP and another company [2024] EWHC 2787 (Ch) Clause 7.2 of the Facility Letter provided that sums advanced were “repayable on demand”, empowering the lenders to require repayment of the entire borrowing at any moment without having to justify the demand. The contra proferentem rule was irrelevant because there was no uncertainty in Clause 7.2 warranting construction against the lenders as the drafting party. The Unfair Contract Terms Act 1977 did not bite, since Clause 7.2 formed...

This Practice Note considers exclusion and limitation of liability in business-to-business (B2B) contracts. This Practice Note offers guidance on the common law and statutory controls that govern exclusion and limitation of liability clauses (also described as limitation of liability clauses, limitation clauses, exclusion of liability clauses, exclusion clauses and exemption clauses), including the Unfair Contract Terms Act 1977 (UCTA 1977) and the Misrepresentation Act 1967 (MA 1967). It identifies which provisions amount to exemption clauses and sets out three central matters to address when drafting them or assessing them in a dispute: incorporation construction statutory controls It also outlines the courts’ treatment of attempts to exclude or restrict liability for certain breaches (eg fundamental breach) and for different heads of loss (eg direct loss, indirect and consequential loss, loss of profits, loss of use and loss of data). It notes common techniques parties use to allocate or restrict risk (eg financial caps, time bars, excluding rights of set-off) and addresses...

This Practice Note explores representations and warranties in business-to-business commercial agreements. It explains what each term means, how they differ, and illustrates their use in practice—covering pre-contractual and contractual representations, express and implied warranties, and collateral warranties. It also outlines available remedies, connected clauses and any contracting-out, third-party implications, and key drafting points. ‘Representation’ and ‘warranty’ have defined meanings and are separate from other familiar contract labels (for example, conditions, indemnities and undertakings), which are not addressed in this Practice Note. For more on such terminology, see: Practice Note: Contract interpretation—conditions, warranties and intermediate terms Practice Note: Indemnities in commercial contracts Undertakings—overview See also Q&A: What is the significance of the words ‘warrants’ and ‘undertakes’ in a contractual obligation? What are representations and warranties and why does the distinction matter? Representations and warranties frequently appear across a broad spectrum of commercial contracts, including: share and asset purchase supply of goods and services IT and...

It is market practice for a tax covenant, sometimes referred to as a tax deed, to be included within the transaction documents for a sale of the entire share capital of a company (the target), where the target is: a private company incorporated in the UK; or a private company incorporated outside the UK with a UK connection (ie, where the buyer is UK tax resident or the share purchase agreement (SPA) is to be governed by English law) This Practice Note sets out: what a tax covenant is what a tax covenant does—broadly, it allocates, by reference to a specified date, responsibility between seller and buyer for the tax liabilities of a target company or group; and how sums paid under a tax covenant are treated for UK tax purposes What is a tax covenant? Parties to the covenant A tax covenant is an agreement between the seller and the buyer, and...

This Agreement is entered into on [ date ] Parties [ insert name of Party A ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ], with its registered office at OR [ insert address ] ] (Party A); and [ insert name of Party B ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ], with its registered office at OR [ insert address ] ] (Party B), (each of Party A and Party B being a party and, together, Party A and Party B constitute the parties). Background Party A conducts the business of [ insert description of Party A’s business ]. Party B conducts the business of [ insert description of Party B’s business ]. Party A and Party B have agreed to [ insert description of proposed transaction ] on the terms...

1 Definitions and interpretation 1.1 Within these Conditions, the terms below shall have the following meanings: Adequate Procedures – to be interpreted in accordance with BA 2010 and the guidance issued under it; Affiliate – any entity that, directly or indirectly, Controls, is Controlled by, or is under common Control with, another entity; Applicable Law – all applicable laws, legislation, statutory instruments, regulations, and governmental guidance having binding effect, whether local or national [ or international in any relevant jurisdiction ]; Associated Person – means any or all of: (a) a party’s officers, employees, agents, subcontractors, subsidiaries, and persons Associated With that party (the Associates); and (b) persons Associated With any of the Associates, in each case engaged in performing services for or on behalf of that party, the Services and/or the Contract; Associated With – when used: (a) in clause 10 and in respect of bribery, shall be read in accordance with BA 2010 and the guidance published under it; (b)...

This Deed of dissolution is entered into on [ insert date ] Parties Each individual whose name and address appear in Schedule 1 (each a Partner and, collectively, the Partners named therein). Background: The Partners have conducted and managed the Business in partnership in accordance with the terms of the Partnership Agreement. The Partners intend to dissolve and wind up the Partnership [ as contemplated by clause [ insert clause number ] of the Partnership Agreement ] on the basis set out in this deed. AGREED TERMS: 1 Definitions and interpretation 1.1 Except where expressly stated otherwise in this deed, the definitions and rules of interpretation in the Partnership Agreement shall govern...

You may wish to consider separately: the implied term the fairness of a dismissal which prejudices Permanent Health Insurance (PHI) rights, under the statutory law on unfair dismissal Where PHI benefits depend on employment continuing, the High Court has implied a term preventing dismissal during incapacity, save for summary dismissal (gross misconduct) or another compelling ground (eg redundancy). In Briscoe v Lubrizol, the Court of Appeal signalled a broader carve-out, permitting dismissal for ‘reasonable and proper cause’. Even so, such a term is not always to be implied. In Lloyd v BCQ (EAT) no implication was made where: a later written contract omitted any reference to the PHI scheme and contained an entire agreement clause there was, overall, no contractual entitlement to scheme benefits the contract expressly permitted dismissal for prolonged illness For more detail, including reconciling Briscoe and Lloyd, see Practice Notes: Dealing with long-term or chronic sickness—Consider any Permanent Health Insurance (PHI)...