Entire Agreement clauses and contract interpretation

NHS v Vasant (Court of Appeal) [2019]

So called ‘entire agreement’ clauses are a familiar part of contractual ‘boilerplate’. As their name would suggest, they are intended to make clear that the executed written document is the entire agreement between the parties


The Agreement in question between the NHS and a dental practice contained the following provisions “Subject to any variations [agreed in writing and signed on behalf of both parties] this Contract constitutes the entire agreement between the parties with respect to its subject matter. The Contract supersedes any prior agreements, negotiations, promises, conditions or representations, whether written or oral”.

The NHS issued a ‘Contract Variation Agreement Form’ or ‘VAF’. The VAF was signed on behalf of each party. Problems arose when the NHS sought to terminate the Contract and argued that the VAF had been insufficient to vary the Contract because it only described the variation to the services being provided in very general terms. The judge at first instance rejected that argument as did the Court of Appeal although they did so for different reasons. One of the issues discussed was what was the impact of the entire agreement clause?


The Court of Appeal judgment made a number of points.

Firstly, in relation to the words ‘subject to’ the Court said that “where one clause in a contract is said to be "subject to" another clause in the same contract, the second clause takes precedence over the first”. This is entirely unsurprising.

Secondly, the Court held that the combination of the no oral variation clause and the entire agreement clause, taken together, evidenced a clear purpose of ensuring that all the terms of the bargain are to be found in the combination of the original contract and any written variation compliant with the no oral variation clause. Again, this seems entirely unsurprising.

Third, extrinsic evidence is admissible to explain the meaning of unconventional expressions in a contract, especially where the expression in question is used in a particular sector of economic activity. This is also the case where the specific parties in question seem to have habitually used a particular word or phrase in an unconventional or ‘private dictionary’ sense. The Court said that the fact that the contract contains an entire agreement clause does not affect this principle. The entire agreement clause is concerned with identifying the terms of the contract. It does not preclude evidence which explains what those terms mean.

Finally, an ’entire agreement’ clause does not preclude the implication of a term that is intrinsic to the agreement or one that is necessary to give business efficacy to the contract. In this case the Court seemed prepared to imply a term that the dentists should be paid a ‘fair’ price for services rendered even in the absence of express agreement.

Points to Note:

back to archive