What do merger clauses signify in contracts?

Merger clauses, also known as integration clauses, signify that the written contract is the complete and final agreement between the parties involved. This means that any prior negotiations, discussions, or agreements that are not included in the written contract are considered to be superseded and have no legal effect. By including a merger clause, the parties affirm their intention that all aspects of their agreement are contained within the written document, and they intend for it to serve as the definitive source of their contractual obligations.

This understanding helps to prevent disputes over what was agreed upon by clearly establishing the written contract as the only binding reflection of the parties' intentions and understanding. Essentially, it provides clarity and certainty, as parties cannot later claim that there were additional, unwritten terms or agreements that should also be considered part of their contract.

In this context, the notion that the written contract could be merely a draft or that it can be amended orally contradicts the very purpose of a merger clause, which is to solidify and finalize the terms without ambiguity.