Unpacking Entire Agreement Clauses: On the (Elusive) Search for Contractually Induced Formalism in Contractual Adjudication.

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Date: Mar. 2021
From: McGill Law Journal(Vol. 66, Issue 3)
Publisher: McGill Law Journal (Canada)
Document Type: Article
Length: 17,353 words
Lexile Measure: 1720L

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Abstract :

This article examines the extent to which entire agreement clauses (EACs) are enforceable under the Canadian common law of contracts and the extent to which these contractual provisions are effective in promoting contractual certainty. EACs are generally found in commercial agreements between legally sophisticated parties and in contracts of adhesion with inequality of bargaining power between parties. Their purpose is to promote contractual certainty by establishing that the full terms of the contracts are to be found in the document containing the clause. Although the goal of EACs is to promote contractual certainty, their legal significance is far from definitive and their effectiveness is subject to several limitations. On some occasions, courts have given effect to EACs to prevent pre-contractual statements from being legally operative; in others, they have disregarded them and recognized the validity of claims based on statements external to the contract. This paper aims to examine the relevant case law relating to the enforcement of EACs and to assess the overall effectiveness of such clauses as a contractual device for promoting contractual certainty. It is suggested that courts could incrementally improve legal certainty, by more markedly differentiating the legal treatment of EACs found in fully negotiated contracts between sophisticated parties and contracts of adhesion. Cet article examine la mesure dans laquelle les clauses d'integralite du contrat (CICs) sont executoires selon la common law canadienne des contrats et l'etendue de leur efficacite dans la promotion de la certitude contractuelle. On retrouve generalement les CICs au sein d'ententes commerciales entre des parties juridiquement sophistiquees ainsi que dans des contrats d'adhesion ou une inegalite de pouvoir de negociation entre les parties est presente. L'objectif des CICs est de promouvoir la certitude contractuelle en etablissant que les termes complets du contrat sont dans le document contenant cette clause. Bien que le but des CICs soit de promouvoir la certitude contractuelle, leur portee juridique et leur efficacite sont sujettes a plusieurs limites. A certaines occasions, les tribunaux ont donne effet a des CICs afin d'empecher des declarations precontractuelles d'etre juridiquement operantes; a d'autres, ils les ont ignorees et ont reconnu la validite de reclamations basees sur des declarations externes au contrat. Cet article a pour objectif d'examiner la jurisprudence pertinente en ce qui a trait a l'execution des CICs et d'etablir leur efficacite en tant qu'outil servant a promouvoir la certitude contractuelle. Il est suggere que les tribunaux puissent progressivement ameliorer la certitude contractuelle en distinguant d'une facon plus marquee le traitement juridique des CICs trouvees dans des contrats pleinement negocies entre des parties sophistiquees et celles au sein de contrats d'adhesion.

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Gale Document Number: GALE|A700859515