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Topic: Contractual clauses

whole agreement clause
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Whole agreement clause

Whole agreement clause

Insert our whole agreement clause into all new contracts of employment, to make clear that any previous oral or written agreements, discussions, negotiations, promises, correspondence, assurances, representations or understandings between you and the employee are superseded by the terms of the contract of employment.

Whole agreement

A “whole agreement” clause (sometimes called an “entire agreement” clause) is inserted into the contract of employment stating that it contains the whole and entire agreement between the parties in relation to the employment and that it supersedes and extinguishes any previous oral or written agreement, discussion, negotiation, promise, correspondence, assurance, representation or understanding between the parties. So, it excludes prior discussions with employees, say, at the job interview in favour of the written terms of the contract only. It’s worth adding such a clause into all contracts of employment to provide certainty about what the contractual provisions are and to protect your position. That said, you still need to be careful not to make verbal representations to job applicants and employees about the terms and conditions of employment which could form grounds for future disagreement. Also, be aware that if a contract of employment departs from the intentions of the parties, an employment tribunal may be able to look behind the written terms to determine the true nature of the relationship between the parties. 

Misrepresentation claims

A whole agreement clause isn’t enough, on its own, to exclude liability for misrepresentation. A misrepresentation is an untrue statement made by X to Y, which induces Y to enter a contract with X, thereby causing Y loss. To protect against liability for misrepresentation, you should also include a non-reliance statement and an exclusion of liability provision. We’ve included both these in our clause. A non-reliance statement is a confirmation that the employee hasn’t relied on any representations you’ve made which aren’t set out in the employment contract. It aims to prevent the employee alleging they were induced to enter into the employment contract by a pre-contractual representation, so as to avoid claims in misrepresentation arising in the first place. An exclusion of liability provision then expressly excludes your liability for innocent or negligent misrepresentation that would otherwise arise. You can’t, however, exclude your liability for fraudulent misrepresentation and any exclusion of liability still needs to satisfy the statutory test of “reasonableness”.

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