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Contracts - Interpretation - Entire Agreement Clause

Packall Packaging Inc. v. Ciszewski (Ont CA, 2016)

In this case the Court of Appeal circumvented the effect of 'entire agreement' clauses within a separation agreement with the following reasoning:
[20] The appellants submit that three terms of the Separation Agreement prevented the motion judge from implying a term restricting Anita from selling her shares in Anita Co. without Henry’s consent. Section 1.6 states: “This Agreement replaces all oral or written agreements made between the parties.” Section 5.2 states:
Anita and Henry do not want any court to order a change which deviates from or overrides the terms of this agreement, and more particularly this release. Anita and Henry want the court to uphold this agreement in its entirety inasmuch as they are basing their future lives upon this release.
Finally, s. 9.1 states: “There are no representations, collateral agreements, warranties or conditions affecting this Agreement.”

[21] The motion judge referred only to s. 9.1, holding that it does not deal with implied terms: at para. 46.

[22] I do not accept the appellants’ submission on this issue. I agree with the motion judge that the language of s. 9.1 does not preclude the implication of a term. Nor does the language of ss. 1.6 and 5.2. In any event, as this court stated in CivicLife.com Inc. v. Canada (Attorney General) (2006), 2006 CanLII 20837 (ON CA), 215 O.A.C. 43, at para. 52, the presence of an entire agreement clause will not preclude the implication of a term of the contract because the term is already part of the existing agreement: finding an implied term does not add a term to the agreement that was not part of the parties’ bargain, but enforces the parties’ reasonable expectations.

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