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The Entire Agreement Clause

Commercial contracts often contain an entire agreement clause. An entire agreement clause stipulates that the written agreement contains all the arrangements between the parties. However, including an entire agreement clause in a contract which is subject to Dutch Caribbean law does not automatically mean that in interpreting the contract, the court will not attach any significance to e.g. statements made and actions performed before the contract was concluded.

The entire agreement clause comes from US and English law, and is related to the so-called parol evidence rule. That rule – with some exceptions – prohibits the providing of oral or other evidence to prove that the parties made agreements other than those recorded in the contract. In principle, only the provisions within the four corners of the contract apply. By including an entire agreement clause in the contract, the parties agree that the parol evidence rule applies in full to the agreement.

However, Dutch Caribbean law does not have the parol evidence rule. The so-called Haviltex standard is the main rule in the Dutch Caribbean. According to this standard it is not the text of the contract that is decisive, but the meaning that the parties could have reasonably attributed to the provisions of the contract given the particular circumstances at hand, and what they could reasonably have expected from each other in this respect. In interpreting a contract the court can therefore take note of, for example, statements made by the parties and draft versions of the final agreement. It should be noted that there are exceptions to the Haviltex standard.

However, in its case law the Supreme Court confirmed that in interpreting commercial contracts, the Haviltex standard is the starting point and the circumstances of the case must therefore be taken into account. On grounds of the Haviltex standard, the effect of an entire agreement clause also changes depending on the circumstances of the case. In interpreting a contract, a Dutch Caribbean court could nonetheless attach significance to, for instance, statements made and actions performed before the contract was concluded, despite an entire agreement clause. In short: whether the entire agreement clause defeats the Haviltex standard also depends on the circumstances of the case.