Beware The Boilerplate: Merger And Integration Clauses

It is fairly common for a defendant sued on a debt to assert, long after the money's been spent, that he was defrauded into entering the transaction. Such "fraud in the inducement" claims are very difficult to have dismissed on summary judgment, because allegations of fraud are generally accepted to raise issues of fact. One of the most fact-intensive elements of a fraudulent inducement claim is whether the defrauded party actually relied on the other party's representations in entering the contract, and whether such reliance was reasonable. A merger clause that negates reliance, may bring the lender one step closer to defeating this argument.

Can a merger clause beat allegations of fraud in the inducement? Maybe.

A merger clause is a contractual provision to the effect that the written terms of the contract may not...