Common Contract Clauses: Merger
A merger clause (also known as an integration or entire agreement clause) is found in most contracts. A typical merger clause serves to establish that the contract is not only the final but also the complete agreement between the parties.
The parties usually want their obligations to be expressed in a single agreement. Hence, the purpose of a merger clause is to prevent a party (or a judge, in the event of litigation) from maintaining that the contract doesn’t represent the entire agreement between the parties.
Including a merger clause helps limit the ability of another party to rely on other written or verbal communications to interpret, supplement, or contradict the terms of the contract.
Tip: Documents like exhibits, schedules, and the like that are incorporated by reference into the main contract should be explicitly identified in the merger clause as part of the contract so as to be considered part of the entire agreement.
This issue arises more often than you might think, particularly when the parties have exchanged prior documents (e.g., requests for proposal, letters of intent, emails, etc.) or made oral assurances. It also tends to happen when parties that have had an ongoing business relationship enter into an agreement with different terms, but one of the parties expects their relationship to continue as usual.
Other Common Contract Clauses