Michigan

The Importance of Integration/Merger Clauses in Michigan Contracts

Contracts are the foundation on which business deals are done. Parties to a business transaction may spend a lot of time and money on negotiating and finalizing their deal. Most important deals are put into writing, i.e.,, a written contract. Depending on the type of contract, there are a number of different kinds of clauses that may be included.

One of the most important clauses that can go in a contract is the integration clause (also known as the merger clause. What is an integration clause? Put simply, an integration clause prevents parties to a contract from claiming later that the contract doesn't bind the parties as written because it doesn't reflect their entire understanding, it was altered by a subsequent oral agreement, or because it's inconsistent with one or more prior agreements.

Here's a sample integration clause:

This Agreement and the exhibits attached hereto contain the entire agreement of the parties with respect to the subject matter of this Agreement, and supersede all prior negotiations, agreements and understandings with respect thereto.

There are two main points that parties entering into a contract should remember about integration clauses. First, generally speaking, a contract should contain an integration clause. This will help to prevent a party from successfully claiming that certain promises or commitments were made to them even though they aren't in the contact document itself. Second, each party to a contract that has an integration clause should confirm that all of the promises and agreements are actually included within the written contract. If they aren't, those promises and agreements may be difficult -- if not impossible -- to enforce.

Any Michigan business or entrepreneur who is entering an important contract or agreement should involve an experienced Michigan business/contract lawyer to make sure their rights are fully protected and their business goals are met.

Full post as published by Michigan Business Lawyer Blog on October 22, 2008 (boomark / email).