Integration Clause

After weeks or, perhaps, months of negotiating a contract you now have a final version of an agreement ready for signatures. While reviewing it, you notice an "integration clause" (or "entire agreement clause") that reads as follows:

Integration Clause: This Agreement is the entire and sole agreement of the parties hereto with respect to its subject matter. It may be modified or amended only by a written instrument executed by the parties hereto (or, if applicable: by XXX [name of party to contract] and an Officer [or a Partner, if applicable] of Company YYY [name of other party to contract]. There have been no representations, warranties or promises outside of this agreement. This agreement shall take precedence over any other documents that may be in conflict with it.

This clause is used to preclude either party from later claiming that there were oral promises, representations or contract terms in addition to those stated in the written agreement. It proclaims to the courts that this written agreement supersedes any and all previous oral or written communications between the parties except those communications which were also included in the written contract. In effect, no party may rely on promises made during the contract negotiations but not included in the written contract.

A red flag should go up when you're told "we never enforce that clause" or when you notice key terms are missing from the contract or are contradicted by other written terms. The integration clause makes that oral statement unenforceable by you, but the objectionable written clause will be enforceable by the other party. If they "never enforce" a clause, have them delete it from the contract.

Just as importantly, under the above integration clause, all future changes to the contract should be in writing and signed by the parties to the original contract. Otherwise, you may find it costly and difficult, if not impossible, to enforce the amended contact terms.