Entire Agreement clause ineffective to exclude implied terms or misrepresentations

In the recent case AXA Sun Life Services plc v Campbell Martin Ltd and others [2011] EWCA Civ 133 case the English Court of appeal considered the following entire agreement clause.

This Agreement and the Schedules and documents referred to herein constitute the entire agreement and understanding between you and us in relation to the subject matter thereof. Without prejudice to any variation as provided in clause 1.1, this Agreement shall supersede any prior promises, agreements, representations, undertakings or implications whether made orally or in writing between you and us relating to the subject matter of this Agreement but this will not affect any obligations in any such prior agreement  which are expressed to continue after termination.

The Court decided that the clause didn’t exclude any remedies in respect of pre contractual misrepresentations. This decision is consistent with the Sky v. EDS judgement of last year. So to put it plainly if you want to exclude liability for any misreps you have to be very clear (and remembering that you can’t exclude liability for fraudulent misreps).

Second, the court stated the clause did not exclude any implied terms, such as the implied warranty of reasonable skill and care in a service contract. (This is something I have often wondered about – and now I have an answer). 

Of course most agreements have an exclusion of implied warranties at the end of the warranties clause – but that may not exclude all implied terms – so I often beef up that exclusion to exclude all “implied warranties, implied conditions*, implied licences and/or implied terms”.

This is another anti-supplier judgement. Am I detecting a trend here?

* For the law geeks out there the exclusion of implied conditions is technically only relevant for Scots law contracts. However, I tend to include it even in English law contracts.

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February 2011
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