Are pre-contractual dealings relevant in determining what constitutes the Contract?

Nov 21, 2022 | Publication | 0 comments

If you spend days, weeks or months negotiating a deal, and the deal is subsequently reduced to writing and signed, are the negotiations which took place prior to the agreement being signed relevant in determining what you have agreed to?

Generally speaking, no.

When parties sign an agreement, the Courts will assume, as a starting point, that the written agreement contains the entire agreement between the parties.

There are some exceptions to this.

Perhaps there was an oral agreement before the a written agreement.  This would mean that there is, in fact, two agreements.

If there was some misrepresentation by a party before the contract was signed, the negotiations which took place prior to the signing of the contract may be relevant regarding the effectiveness of the contract.

If the parties made a mistake as to what they were agreeing to, the negotiations may also be relevant in relation to whether the contract can be enforced.

If there was duress or unconscionable conduct in the negotiations, the pre-contractual dealings may also be relevant.

But the usual position is that the written contract is the whole agreement.

The reason why the Courts take this position is simple.

If a written contract is not considered to be the whole agreement, it would be very complicated to work out what had actually been agreed.

This means that contracts need to be carefully drafted so that they truly reflect the intentions of the parties.

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