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Watford Electronics v Sanderson

[2001] EWCA Civ 317

Case summary last updated at 02/01/2020 15:42 by the Oxbridge Notes in-house law team.

Judgement for the case Watford Electronics v Sanderson

Chadwick LJ on “entire agreement clauses”: The courts should not refuse to give effect to such clauses negotiated between parties of equal bargaining strength so that they can order their affairs and avoid the legal uncertainty that comes from allowing representations or supposed warranties from outside the document to be considered. Such clauses are not void under s.3. “[The bargaining parties] should be taken to be the best judge of the commercial fairness of the agreement, which they have made; including the fairness of each of the terms in that agreement.” This second reason for allowing entire agreement/non-reliance clauses to be effective is that it allows the parties to choose and negotiate the terms on which they are willing to do the deal i.e. a more accurate reflection of supply and demand. An acknowledgement of “non-reliance” could act as evidential estoppel to prevent the acknowledging party from later refuting that claim. 
 NB This applies only to a case where the parties are of equal bargaining power- “entire agreement” clause could still be ineffective in another context. 

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