In Axa Sun Life Services plc v Campbell Martin Ltd and others  EWCA Civ 133, the Court of Appeal for England and Wales rejected attempts by AXA to use an entire agreement clause to prevent the Campbell Martin parties from bringing claims based on alleged misrepresentations and breach of collateral warranties or implied terms. The Court of Appeal found that, since the entire agreement clause under consideration was a basic ‘boilerplate’ statement, the clause as worded was ineffective to exclude misrepresentations. It was also found not to exclude implied terms that were necessary to give the contract business efficacy, but it did exclude collateral warranties and other extrinsic terms. The Court of Appeal based its conclusions on the particular wording of the clause, but the decision and its reasoning are significant for parties to English law contracts as it provides guidance on the drafting and use of these clauses. The Court of Appeal also considered the application of the Unfair Contract Terms Act 1977 to the entire agreement, set-off and conclusive evidence clauses.
The Dispute and Decision at First Instance
AXA had entered into agreements on its standard form with each of the respondents appointing them agents to sell its financial products on commission. The agreements provided that AXA was entitled to claw back commissions paid to the agents if customers later cancelled the product they had purchased. After terminating the agency agreements, AXA brought claims against each of the agents for commission clawbacks and other sums. The agents contested these claims and argued that AXA had made certain negligent and fraudulent misrepresentations and other collateral warranties in order to induce them to enter into the agreements. The agents further argued that certain terms imposing obligations on AXA should be implied and read into the agreements, and that AXA had breached those implied terms causing the agents further loss and damage for which they were entitled to be compensated.
A trial was held on four issues concerning the effect of certain provisions of the agreement, and the application of the Unfair Contract Terms Act 1977 (UCTA) to those provisions, namely:
- whether the entire agreement clause prevented the agents from alleging that AXA had made non-fraudulent misrepresentations or from alleging the existence of any collateral warranties and/or implied terms;
- whether the set-off clause prevented the agents from claiming set-off in respect of sums counterclaimed against AXA;
- whether the conclusive evidence clause giving AXA the exclusive right to determine amounts due under the agreement prevented the court from determining amounts due in the absence of manifest error; and
- if the answer to the second and third issues was "yes", whether the relevant clauses satisfied the reasonableness test set out in UCTA.