Integration Clause

“An integration clause refers to language in a writing or writings adopted by the parties contracting, whereby the parties state that the writing is the final and complete expression of the parties’ agreement.” Siegner v. Interstate Prod. Credit Ass’n of Spokane, 109 Or. App. 417, 429 (1991)

“An integration clause is designed to bind the parties to the terms of their written agreement.  By using an integration clause in a contract, the parties are explicitly manifesting their intention to protect themselves against misinterpretations which might arise from extrinsic evidence.  Where an integration clause is included in an agreement, the four corners rule applies and extrinsic evidence is not admissible to interpret the agreement. In contrast, the provisional admissibility approach allows the use of extrinsic evidence to aid in interpreting an agreement that is otherwise unambiguous on its face.  Under that approach, the court first provisionally examines the extrinsic evidence to determine whether there is an ambiguity.  The provisional admission approach does not apply to contracts with an integration clause.”  In re Marriage of Lewin, 2018 IL APP (3d) 170175 (2018).

“An integration clause is also known as a merger clause and provides that the contract to be signed represents the final agreement, merges all prior versions and supersedes any prior discussion or version. An integration clause prevents claims based on agreements reached during the negotiations that led to the signing of the contract which were not written into the contract itself.  During contract negotiations, a party may propose terms, conditions, and provisions which are ultimately rejected in order to reach a compromise with the other party. That other party, of course, may do the same. The integration clause makes clear that the negotiations leading to the written contract are not the agreement.”  Marler v. Wulf, 2021 IL APP (1st) 200200-U (2021).

“The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement.  Under California law, the presence of an integration clause in the contract is not conclusive but is a factor which “may help to resolve that issue. In considering whether a writing is integrated, the court must consider the writing itself, including whether the written agreement appears to be complete on its face; whether the agreement contains an integration clause; whether the alleged parol understanding on the subject matter at issue might naturally be made as a separate agreement; and the circumstances at the time of the writing.”  Kanno v. Marwit Capital Partners II, L.P., 18 Cal.App.5th 987 (2017).

“The absence of an integration clause is not a dispositive indicator of the parties’ intent, and, thus, the mere absence of an integration clause is insufficient to rebut the presumption of complete integration.”  Nettleton v. Exact Sciences Corp., No. 6:22-cv-01290 (D. Or. Dec. 13, 2022).

“[Under Illinois law,] an integration clause is a clear indication that the parties desire the contract be interpreted solely according to the language used in the final agreement. The plaintiff was free to negotiate a contract omitting the integration clause. It did not, and it is bound by its bargain.”  Much v. Pacific Mut. Life Ins. Co., 266 F.3d 637 (7th Cir. 2001).

Related entries