Entire Agreement Clause And Misrepresentation
Referring to Butcher v Lachlan Elder Realty Pty Ltd,8 Campbell`s High Court held that commercial contracts often contain a clause on “the whole agreement” that confirms that statements or assurances (including oral statements) that are not contained in the contract have no contractual effect. In an earlier case (Inntrepreneur Pub Co v East Crown Ltd), the judge stated that the purpose of these clauses was to prevent both parties from “hitting the undergrowth and finding, during negotiations, a random remark or statement (often long forgotten or difficult to recall or explain) on which to justify legal action”. The general conditions of sale in contracts for the sale and purchase of land limit a seller`s liability for misrepresentations, although some sellers may go beyond and exclude any claim for misrepresentation. The case is of interest because it indicates that it is not possible to establish general rules on contractual terms and that the courts will consider the treaty as a whole in order to understand the intention of the parties. Therefore, even if the contract does not contain a non-trust clause, it should not be expected that a party will be able to assert a misrepresentation claim. It should be borne in mind that an overall clause in the contract may cause problems for a buyer who wishes to assert this right. A recent Supreme Court decision confirmed that clear words are needed to exclude misrepresentations in a comprehensive contractual clause that must exclude liability for misrepresentations. The parties accepted that the Court of Appeal`s decision in Springwell Navigation Corp vs. J P Morgan Chase Bank &ors  provided that entire contractual terms, such as the clause contained in signed written agreements, were part of the contractual agreement by which the parties had agreed to be bound.
This power was binding on the Court of Appeal, although the defendant companies had the right to argue before the Supreme Court that Springwell had been mistried. . . .