Contract Terms to Know: Entire Agreement (the “Merger Clause”)

We are doing a deep dive into specific contract terms so you will know why they are in the contract.

Couple reviewing a contract to make sure all relevant clauses are included

Some contracts have a paragraph in the boilerplate at the end:

Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the purchase of the assets described herein.  Any agreement hereafter made shall be ineffective to change or modify this Agreement, in whole, or in part, unless such agreement is in writing and signed by the party against whom enforcement of the change or modification is sought.

What this means is that any other agreement, understanding negotiation or document between the parties is null and void after the agreement with a “merger clause” is signed. If there are important understandings between the parties, make sure the agreement you are signing specifically includes those understandings, or specifically references or incorporates another document. Any verbal agreements you have regarding the contract matter will be unenforceable.