Legal Blog

Entire Agreement Clause

10443204 Canada Inc. v. 2701835 Ontario Inc. 2022 Ont CA

Vendor of a coin laundry sued the purchaser for payment of a purchase money loan. The purchaser defended, alleging that the vendor made negligent and fraudulent misrepresentations as to the revenue of the business. The agreement had an entire agreement clause disavowing all representations. It also gave the purchaser the right to review all accounts and attend at the premises for due diligence. The motion judge granted judgment on a summary judgment motion, holding that the entire agreement clause, coupled with the purchaser’s right for and lack of due diligence disentitled the purchaser to claim negligent or fraudulent misrepresentation. The Court of Appeal overturned regarding the fraudulent misrepresentation defence. An entire agreement clause insulates the vendor from the noise of the negotiations, but does not do so for fraudulent misrepresentations – regardless of lost opportunities for due diligence.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.