Integration Clause: Everything You Need to Know
An integration clause involves inserting a short paragraph into a written contract to verify a final agreement between two parties.3 min read
An integration clause involves inserting a short paragraph into a written contract to verify a final agreement between two parties.
What Is a Contract Integration Clause?
After preparing a written contract, one of the parties involved might fail to review it thoroughly to make sure all terms were included and that they both signed the contract. If this occurs, one party might argue that the other failed to perform a specific condition or term they verbally agreed upon.
Occasionally, these parties might be unable to resolve the contract dispute and must turn to litigation. An attorney will provide a detailed legal analysis and determine which party has the right to enforce verbal terms that were omitted from the final written contract.
These drafted written contracts, provided by attorneys or included in form contracts, might have a short paragraph called the entire agreement or integration clause. These are also called merger clauses or merger and integration clauses. This paragraph affects both contracting parties, particularly if one attempts to enforce an aspect originally agreed-upon orally but not included in the final contract.
According to the integration clause, the written contract is the final agreement between two parties and overrides any other oral or written statement. This clause prevents parties from claiming the contract doesn't reflect their agreement. In the United States, an integration clause is not conclusive proof that no extra conditions exist with respect to the contract's performance.
A contract with an integration clause is known as an integrated contract. With this type of contract, the final writing supersedes any previous negotiations.
You can typically find integration clauses at the beginning or end of a contract. Laws governing these clauses vary among states, with courts in California strictly enforcing them. However, the clauses must be carried out just like any other contract clause, such as being signed by all parties. /p>
In some instances, a party can enforce an oral term that's not in the final contract, but this can be difficult. While these exceptions are rare, interested parties should contact legal counsel to find out if an exception can be made.
Integration Clause Examples
Although integration clauses' specific wording might vary, most language includes some variation of the following:
- The contract includes the parties' entire agreement regarding the contract's subject matter.
- The contract overrules all previous agreements, negotiations, and understandings.
- The contract can be changed only if all parties do so in writing.
You can find these integration clauses in a variety of agreements, including:
- Employment. An employee and employer can agree to work as outlined in an employment contract. Integration clauses found in these contracts can keep both parties from claiming different payment amounts than what they originally agreed upon.
- Products for sale. Contracts in this category might negotiate delivery, pricing, and other sales aspects. Merger clauses are used to prevent either party from changing terms.
What Happens if a Party Violates an Integration Clause?
Violations of integration clauses usually occur because one party claims that a previous oral statement, instead of the written terms, is the crux of the agreement. In these instances, the integration clause states that the parties must follow the written contract over any other type of agreement.
However, if one party does not adhere to the written contract's terms, the other party might be able to file a lawsuit. In some instances, the non-breaching party can receive payment for any losses via a monetary damages award.
Before that can happen, eligibility for the award depends on whether the plaintiff has already asked for an injunction. As a result, both parties must be familiar with the legal implications of an integration clause prior to placing one in a written contract.
Do I Need a Lawyer to Draft a Contract Integration Clause?
In some instances, integration clauses can affect the way agreements are enforced. If you have questions about integration or merger clauses, you can reach out to a lawyer that has experience with contracts.
Attorneys can help draft contracts as well as incorporate necessary integration clauses. In addition, lawyers can defend you in court if you are involved in a lawsuit.
If you need help with an integration clause, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.