When to Use an Integration Clause

In putting together a written contract, it is generally best to put all of the agreement terms into the contract and use an integration clause to prevent the application of any terms not in the contract. This puts the obligation on the parties to each make sure the written agreement actually lists everything important to them, and to accept that what is excluded will not apply. Such a process encourages communication and notice and supports the value of the agreement. The caveat is that a party to such an agreement needs to make sure the contract actually represents the results of the negotiations and discussions, includes everything of important to each of them, and says what they intended.

Still, there are situations in which it makes sense to list only specific parts of an agreement in writing, while leaving other parts out. For example, when there is a generally accepted framework for a transaction such as industry standards or customs, and the parties have no intention of doing their transaction differently, those expectations do not necessarily need to all be spelled out in the writing. Only the parts of the interaction which are going to be different, or are not standard, need to be specified. In such situations, the parties should not include an integration clause because the parties did not list everything that needs to apply.

Practice Tip: The use of an integration clause depends on the type of transaction as well as other factors. A written contract should generally include all of the terms that are unique or potentially subject to dispute regardless. The inclusion of an integration clause is a good indicator that the contract is expected to be comprehensive. Legal counsel should be sought to determine if such a term is appropriate, and how the contract should be crafted whether or not it is included.

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