Entire Agreement Clause Restricts Misrepresentation Claim, Ontario Appeal Court Rules

Today’s brief endorsement of the Court of Appeal for Ontario in 1721789 Ontario Inc. v. 985091 Ontario Ltd.,   2010 ONCA 14 (Ont. C.A.) emphasizes the importance of  inserting  an Entire Agreement clause to forestall a misrepresentation claim.  It also reiterates the essentials of pleading all elements of a cause of action. At paragraphs 6-7, Simmons, J.A. (Cronk and LaForme JJ.A. concurring) writes:
“[6]              Concerning the appellant’s assertion that the respondent misrepresented the car wash’s business income, the Agreement of Purchase and Sale contained an entire agreement clause confirming that there were no representations, warranties, collateral agreements or conditions affecting the agreement other than as contained in the Agreement of Purchase and Sale. The appellant deleted conditions in the contract providing for disclosure of financial statements for the car wash business and requiring that the appellant be satisfied with the financial statements.  Moreover, the Agreement of Purchase and Sale also provided that all representations would merge on closing.
[7]               Accordingly, in order to succeed with a claim for misrepresentation, the appellant  had to demonstrate a genuine issue for trial as to whether there had been a fraudulent misrepresentation. The motion judge properly considered the essential elements of a claim of fraudulent misrepresentation and concluded on all the evidence before him that there was no genuine issue for trial concerning whether several of the necessary prerequisites for such a claim were not met in this case. We agree with his conclusion.”

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