Legal Definitions - integrated agreement

An integrated agreement (often referred to as an integrated contract) is a written contract that the parties intend to be the complete and final expression of their understanding. When an agreement is deemed "integrated," it means that the written document is considered the sole and entire record of what the parties agreed upon.

Consequently, any prior discussions, promises, or understandings—whether oral or in earlier written drafts—that contradict, vary, or add to the terms of the final written agreement are generally not allowed to be presented as evidence in court to change or explain the contract's meaning. This principle helps ensure the stability and predictability of written contracts by giving precedence to the final, comprehensive written document.

Here are some examples illustrating an integrated agreement:

• Business Acquisition: Imagine a small business owner selling their company. Over several months, they have numerous informal discussions, exchange emails, and draft preliminary proposals with the buyer about various aspects of the sale, including inventory, client lists, and employee retention. Eventually, they sign a comprehensive "Asset Purchase Agreement" that includes a clause stating, "This Agreement constitutes the entire agreement between the parties and supersedes all prior discussions, negotiations, and agreements, whether oral or written."

  Illustration: If a dispute arises later, and the buyer tries to claim that the seller verbally promised to provide a specific piece of equipment not mentioned in the final written agreement, a court would likely disregard that claim. Because the Asset Purchase Agreement is an integrated agreement, the court would only consider the terms written within that final document, not the earlier verbal promises or preliminary emails.

• Software Development Contract: A startup company hires a software development firm to build a new mobile application. They have several meetings, exchange detailed technical specifications, and discuss various features and functionalities. After much back-and-forth, they sign a formal "Software Development Agreement" that explicitly states it is the complete and exclusive agreement between the parties regarding the project.

  Illustration: If, during development, the startup claims the software firm promised a particular advanced feature in an early meeting that was not included in the final signed contract, the firm could argue that the integrated agreement governs. The court would likely uphold the written contract as the full expression of their agreement, making it difficult for the startup to enforce the verbally promised feature.

• Commercial Lease Agreement: A restaurant owner is negotiating a lease for a new space. The landlord verbally assures them that they will install a brand-new, state-of-the-art ventilation system before the restaurant opens. However, the final written "Commercial Lease Agreement" makes no mention of a new ventilation system and contains a standard clause stating that the lease document represents the entire agreement between the landlord and tenant.

  Illustration: If the landlord fails to install the new ventilation system, the restaurant owner generally cannot sue based on the landlord's prior verbal promise. Because the commercial lease is an integrated agreement, the court would consider the written lease to be the complete and final understanding, and any prior verbal promises not included in the written document would typically not be enforceable.