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When an 'entire agreement' clause explicitly includes a common exception for 'fraudulent misrepresentation,' what specific type of pre-contractual statement remains actionable despite the clause's general intent?



The specific type of pre-contractual statement that remains actionable despite an entire agreement clause explicitly including a common exception for 'fraudulent misrepresentation' is fraudulent misrepresentation itself. An entire agreement clause is a contractual provision designed to ensure that the written contract contains all the terms agreed upon by the parties, stating that the written document constitutes the whole and only agreement between them. Its general intent is to prevent claims based on any prior discussions, promises, or representations that are not included in the final written contract, thereby aiming to provide certainty and finality to the contractual terms. A pre-contractual statement refers to any communication, whether oral or written, made by one party to another before the formal signing of a contract, which might have influenced the other party's decision to enter into the agreement. When such a clause explicitly includes an exception for 'fraudulent misrepresentation,' it means that any pre-contractual statement that qualifies as fraudulent misrepresentation remains actionable, allowing the deceived party to seek remedies despite the general exclusionary intent of the entire agreement clause. Fraudulent misrepresentation occurs when a party makes a false statement of a material fact, knowing it to be false, or without belief in its truth, or recklessly careless as to whether it is true or false, with the intention that the other party will act upon it, and the other party does act upon it to their detriment. An actionable statement is one upon which a legal claim can be based, allowing a party to pursue legal remedies such as damages or rescission of the contract. This type of misrepresentation remains actionable because it is a fundamental principle of common law and public policy that parties generally cannot contractually exclude or limit liability for their own fraud. Fraud is considered to vitiate true consent to the contract, meaning it undermines the very basis of agreement, and therefore, a party cannot shield themselves from the consequences of their deliberate dishonesty through contractual terms. The explicit inclusion of the exception merely clarifies and reinforces this established legal position.