The merger clause states that the contract is a complete statement of the agreement and that any previous agreements or negotiations, oral or written, that are not contained in the contract are not part of it. The purpose of this clause is to show that both parties completely understand all of the terms that were agreed upon and that neither party can alter the conditions after the contract has been signed. It is also sometimes called an integration clause.
Example: Andy and Greg made an oral agreement that Andy would pay Greg $20 if he mounted Andy’s new TV. Greg wrote out a contract, which contained a merger clause, and changed the fee to $25. By signing the new contract, not only did Andy agree to pay the new price, but he also agreed that the oral contract with the lower price was no longer valid.
Sample – Purchase Agreement:
This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties.