What Is a Merger Clause?A merger clause (a.k.a. integration clause) prevents a party from claiming the contract does not reflect the complete understanding of the parties after the contract was formed. Parties often attempt to do this by relying on pre-contract negotiations or oral agreements after the contract is formed. The merger clause ensures that the written contract is the complete agreement between the parties. A typical merger clause will say, "This agreement contains the entire agreement of the parties." What Type of Contracts Contain Merger Clauses?Merger clauses are found in a majority of contracts. Here are some examples: - Employment contract - Many employment contracts will specify exactly what benefits an employee will receive, such as health and retirement benefits. Merger clauses are placed in these contracts to prevent an employee from claiming they were promised more than the contract provides.
- Sale of goods agreement - Likewise, sale of goods agreements specify the amount of goods, price per unit, time of delivery, and other specific terms in the contract. A merger clause often prevents a buyer or seller from changing these terms.
Are Merger Clauses Always Enforceable?Merger clauses are generally enforceable. However, some states will not enforce a merger clause unless it is specific as to what terms are merged. An experienced attorney will be able to inform you of what is required for an enforceable merger clause. How Can a Lawyer Help Me?Drafting contracts can be risky business. When you are a party in a contract, it is important that the contract is legally valid and the expected benefits from the contract are realized. Consult an experienced attorney to help you through the contract drafting process and ensure that proper clauses are included and valid. |
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