A number of recent cases have signalled a change in approach by the courts when analysing non-reliance provisions in entire agreement clauses. Previously, these provisions were commonly regarded as capable of giving rise to an evidential estoppel (also known as an estoppel by representation). However, it was not always possible to establish this estoppel where it could be shown that the estoppel did not reflect the underlying factual position. However, there is now an increasing tendency to interpret these provisions as giving rise to a different form of estoppel, known as "contractual estoppel". This is not just a semantic change as a "contractual estoppel" is less likely to be defeated where there is a difference between the underlying facts and the terms of the estoppel. This change is particularly relevant to financial institutions, with the widespread usage of non-reliance clauses in different forms of investment, finance and trading documentation and the majority of cases arising in this sector. The practical outcome of recent cases is that it is now harder to bring claims based on allegations inconsistent with non-reliance provisions. Click here to read our e-bulletin on these developments.
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