What is a merger clause?

A merger clause is a legal term used in contract law in Texas and other jurisdictions. It is an agreement between two or more parties that essentially states that all prior negotiations, proposals, and understandings related to the subject matter of the contract are superseded by the final written agreement. This means that the contents of the contract supersede any and all oral agreements or prior understandings between the parties. The purpose of a merger clause is to prevent any party from relying on any prior agreements, discussions or negotiations to make a claim against the other parties involved. A merger clause is important to include in a contract because it helps protect all parties’ rights and eliminates any confusion as to what was agreed upon. It also serves as a reminder that only the written agreement is legally binding and any other agreements are not enforceable. When a merger clause is included in a contract, it is typically followed by a list of any exceptions that would still be considered legally binding. This list of exceptions helps clarify any agreements that remain in effect even after the merger clause has been signed. In Texas, a merger clause can help protect all parties engaged in contract negotiations. It ensures that all parties abide by the terms of the contract and it prevents any disputes or misunderstandings by clearly outlining the terms of the agreement.

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