AXA Sun Life Services v Campbell Martin [2011]
Court: Court of Appeal
Facts: AXA Sun Life Services Ltd (D) made fraudulent misrepresentations to Campbell Martin (C) during negotiations. The contract between AXA and Campbell Martin included an entire agreement clause, Clause 24, which stated that the agreement constituted the entire understanding between the parties and superseded any prior promises, agreements, representations, or implications, whether written or oral. The issue arose whether this entire agreement clause could effectively exclude liability for the fraudulent misrepresentations made by AXA.
Issue: Did Clause 24 of the contract exclude liability for fraudulent misrepresentations made before the agreement was signed?
Held: The Court of Appeal ruled that Clause 24 did not exclude liability for fraudulent misrepresentations.
Key Judicial Statements: Rix LJ: He noted that Clause 24, while covering prior promises and agreements, did not specifically address the exclusion of liability for misrepresentations. The term "representations" in the clause was surrounded by contractual terms like "promises" and "agreements," but the clause did not explicitly state that no reliance was placed on these representations or that liability for misrepresentations was excluded.
Rix LJ emphasized that for an entire agreement clause to exclude liability for misrepresentations effectively, it must contain clear and explicit language indicating such exclusion. He outlined three acceptable ways to exclude liability for misrepresentations:
Explicitly stating that no representations were made.
Stating that there was no reliance on any representations.
Including an express exclusion of liability for misrepresentations.
He concluded that Clause 24, as it stood, was only concerned with defining the contractual agreement and did not address or exclude liability for prior misrepresentations.
💡 Leveluplaw: This case reinforces that while entire agreement clauses are important for defining the scope of a contract, they don't automatically shield a party from liability for fraudulent misrepresentations. To exclude such liability, contracts need clear and specific language indicating that misrepresentation claims are being waived.