Most business owners have seen “entire agreement” or “integration” clauses in contracts with employees, vendors, purchasers of their products and services, and joint venture partners. To many, it is boilerplate jargon that sounds strange and has little practical meaning. A typical clause provides: “This agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous drafts, agreements, arrangements and understandings between them, whether written or oral, relating to this subject matter.”

These clauses are important, however, because if properly drafted they can dramatically limit a business owner’s exposure to liability.