This article posted on our partner site Mondaq.com examines the purpose of “entire agreement” clauses which are used to prevent parties who enter into a final contract from invoking prior discussions or understandings to give a different meaning to its provisions and preserve the stability of contractual relations. However, in IHAG-Holding AG v Intrawest Corporation, the court set aside the “entire agreement” clause to consider a prior letter of intent in order to determine the method to be used to calculate the purchase price. What this article encapsulates is the fact that sometimes it is justifiable to set aside the “entire agreement” clause in favour of a previous “true intention” of the parties, particularly when it becomes obvious that one party is attempting to exploit a mistake.
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