The parties acknowledge and agree that this Agreement constitutes the entire agreement between them with respect to the subject matter hereof, and that it supersedes all prior oral or written agreements, representations or understandings between them relating to such subject matter. Neither party has relied upon any representation, warranty, collateral contract or other assurance (except those set out in this Agreement) made by or on behalf of the other party before the signature of this Agreement. Neither party shall have any remedy in respect of any untrue statement made by the other party upon which that party relied in entering into this Agreement (unless such untrue statement was made fraudulently or was as to a fundamental matter including as to a matter fundamental to the other party's ability to perform its obligations under this Agreement) and that party's only remedies shall be for breach of contract as provided in this Agreement.
Here is a plain English explanation of the No Future Obligations clause:
- This Agreement is the entire agreement between the parties on this matter.
- It replaces any previous agreements, representations, or understandings on the subject.
- Neither party has relied on any representation or promise made by the other party before this Agreement was signed, except those outlined in this Agreement.
- Neither party can seek a remedy if the other party made an untrue statement they relied on in entering this Agreement, unless the untrue statement was fraudulent or fundamentally altered a core aspect of the Agreement.
- The only remedies available are for breach of contract under this Agreement.
- Essentially, this clause wipes the slate clean regarding any previous deals, statements, or expectations between the parties.
- It makes this Agreement the sole benchmark for their rights and obligations related to the subject matter.
The concept of limiting contractual obligations to those expressly contained in the written agreement has long been a feature of English common law.
As early as the 17th century, English courts demonstrated a reluctance to consider extrinsic evidence when interpreting contracts. This parol evidence rule emerged from a desire to respect the written words of an agreement.
By the 18th century, the merger doctrine had also developed in English law. This holds that upon signing, all prior negotiations and agreements merge into the final contract. Terms not included are intentionally excluded.
In the 19th century, these principles coalesced around the four corners rule, which limited interpretation to the four corners of the written document. No other evidence of intent or meaning could contradict the plain language.
Modern English law has retained this strict approach to determine parties' rights and obligations based solely on the negotiated contract terms. Clauses like "No Future Obligations" have their roots in centuries of English legal tradition that gives preeminence to the final integrated agreement of the parties.
Extrinsic statements and promises made during negotiations do not survive signing, unless there is fraud or material misrepresentation.