Entire Agreement Clauses — The Limits of Prior Negotiations

Pre-contract negotiations in construction are extensive. Tender clarifications, commercial meetings, site visits, employer briefings, and scope discussions all take place before the formal contract is executed. Parties may make statements, give assurances, and exchange information that shapes the contractor’s pricing and programming assumptions. Then the formal contract is signed — and it contains an entire agreement clause.

The Problem

The entire agreement clause is designed to prevent exactly the scenario described above: a party cannot, after signing the contract, point to something said or written before signing and claim it forms part of the contract or varies the written terms. This is commercially sensible — it gives both parties certainty about what they have agreed. But it creates a problem when one party made material assurances during negotiations that influenced the other’s decision to contract, or their pricing.

The Legal Principle

An entire agreement clause excludes prior representations from the scope of the contract. It prevents a party from arguing that the contract should be read to include or be qualified by something said or written before signing. This principle is well established and courts generally uphold these clauses.

However, the Misrepresentation Act 1967 and the courts’ interpretation of it impose significant limits. An entire agreement clause does not automatically exclude liability for misrepresentation — the making of a false statement of fact that induces a contract. To exclude misrepresentation claims, a clause must do so expressly and in clear terms, and even then, its reasonableness under the Unfair Contract Terms Act 1977 (or the Consumer Rights Act 2015 where applicable) may be examined.

The key case is Axa Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133, which confirmed that general entire agreement clauses do not exclude misrepresentation claims without specific language to that effect.

Practical Application

For employers: ensure that any assurances given during the tender process that are intended to be contractually binding are incorporated into the contract documents. If pre-contract representations are not intended to create obligations, the entire agreement clause should be clearly worded to address this, and any misrepresentation exclusion should be expressly stated and carefully reviewed for enforceability.

For contractors: if representations made during tendering are material to your pricing — access arrangements, programme assumptions, ground condition warranties — you must ensure these are incorporated as express contract terms before you sign. An entire agreement clause will not protect you if the employer’s representative said something during a clarification meeting that turned out to be false.

Risks

Contractors who rely on pre-contract assurances without incorporating them into the contract risk finding those assurances excluded by the entire agreement clause. The only available remedy may then be a misrepresentation claim, which requires proof that the statement was false, that it was relied upon, and that it induced the contract — a more difficult case to make than a contractual breach claim.

Employers who give assurances during tendering that they cannot or do not fulfil may face misrepresentation claims even if the entire agreement clause appears to exclude them, where the clause is found to be unreasonable or unclear.

Mitigation

Before signing, audit all pre-contract communications and identify any statements or assurances that were material to the contract price or programme. Incorporate any such assurances as express terms. Ensure the entire agreement clause is clearly worded and, if misrepresentation exclusion is intended, that it is expressed in specific terms and reviewed for legal enforceability in the relevant jurisdiction.

Conclusion

Entire agreement clauses provide useful certainty but are not a complete protection. They are ineffective against misrepresentation claims without additional express language, and even then, their enforceability may be challenged. The surest protection is to make the contract say what was actually agreed.