Entire Agreements Clauses And Misrepresentation Claims

The High Court has confirmed that an entire agreements clause can defeat a claim for misrepresentation.

Shortly after a share sale had taken place, the buyer brought a claim alleging that the seller had misrepresented the company's liabilities. The share purchase agreement had contained a standard entire agreement clause, saying the agreement replaced any previous discussions and set out the entire agreement between the parties. The High Court held that the parties had intended to exclude misrepresentation claims given how wide the entire agreement clause was (it included contractual matters such as 'agreements', 'warranties' and 'promises', and less contractual matters such as 'assurances' and 'negotiations'). There was also provision for the seller to indemnify the buyer for misrepresentations of the company's liabilities, so there was already a contractual mechanism by which a matter like this would be resolved.

This decision...