Monday, February 8, 2016 By Tilly Gray
On March 24, 2015, we circulated a drafting tip on the “entire agreement” provision, which was incorporated into our firm’s Boilerplate Agreement. (Click here to be linked to that drafting tip.)
The Ontario Court of Appeal recently addressed “entire agreement” provisions in Soboczynski. It noted that that its prior decision in Shelanu clarified that “…an entire agreement clause does not prevent the parties from amending their agreement such that post contract events can ‘affect both the enforceability of the obligations in the agreement and add new obligations to those imposed by its terms’”; however, it appears to have gone further by stating, in connection with its analysis of whether the entire agreement clause was intended to preclude an action for negligent misrepresentation based on a post contractual [emphasis added] representation, the following: “A consideration of the precise words the parties used to record their bargain is central to the interpretation of the entire agreement clause…”1 and that “…subject to express wording to the contrary, these clauses do not apply to agreements or representations that post-date the contract in which the clause is found.”2 That is, in Shelanu it was held that the entire agreement clause would apply only to pre-contractual [emphasis added] representations.3
While this decision was made in the context of a real estate transaction, it arguably applies beyond that context.
1 Soboczynski v Beauchamp, 2015 ONCA 282 (CanLII), paragraph 55.
2 Ibid, at paragraph 53.
3 “The clause is worded in the present tense – ‘[t]here is no representation’ affecting the APS (emphasis added). On their face, the words of the clause do not preclude an action for negligent misrepresentation based on a representation made post-contract.” (Ibid, at paragraph 56.)