Entire agreement clause

A small or mid-sized business sale can run for months, generating term sheets, emails and verbal side conversations along the way. An entire agreement clause is what stops a disappointed party from later pointing back to an early email or a verbal assurance as a binding promise that never actually made it into the signed agreement.

The mistake people actually make

Relying on a verbal or emailed assurance — "don’t worry, we’ll sort that out after closing" — instead of insisting it be written into the agreement or a schedule. Once the entire agreement clause is signed, that earlier promise is generally unenforceable no matter how clearly and sincerely it was made during negotiations.

What still survives an entire agreement clause

• Terms actually written into the signed agreement, its schedules and exhibits
• A separate, standalone agreement — such as a non-disclosure agreement — that the clause does not purport to override
• Fraud or misrepresentation claims, which most courts will not let a boilerplate clause shield entirely

The Quebec difference

Quebec’s Civil Code directs courts to interpret a contract according to the common intention of the parties rather than relying only on the literal wording, which can give an entire agreement clause somewhat less absolute force there than in common law provinces, where it combines with the parol evidence rule to exclude outside evidence more strictly.