AXA Sun Life Services v Campbell Martin [2011]
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AXA Sun Life Services v Campbell Martin [2011] EWCA Civ 133 revolved around the effectiveness of an entire agreement clause in excluding liability for prior misrepresentations made by AXA against the claimants. The relevant clause in question, Clause 24 of AXA's contract with the claimants, stated that the agreement constituted the entire agreement and would supersede any prior promises, agreements, representations, undertakings, or implications, whether orally or in writing relating to the subject matter of this Agreement.
Despite the presence of this entire agreement clause, the issue arose as to whether it could effectively exclude liability for the fraudulent misrepresentations made by AXA. The Court of Appeal, in its judgment, held that Clause 24 did not serve to exclude liability for misrepresentation.
Rix LJ, delivering the judgment, pointed out that the term "representations" in Clause 24 was surrounded by words of contractual significance such as promises, agreements, undertakings, or implications. The clause, in its wording, did not expressly state that no reliance was placed on those representations or that liability for misrepresentations was excluded. Rix LJ concluded that Clause 24 was specifically concerned with matters of agreement and did not address misrepresentations.
Moreover, Rix LJ highlighted the need for a clear and explicit statement to exclude liability for misrepresentations. He noted that the exclusion of liability for misrepresentations must be clearly stated in the contract. This requirement was identified as a common thread in various cases, including Peekay v ANZ [2006] and Springwell v JP Morgan [2010]. Rix LJ further enumerated three ways in which liability for misrepresentations could be excluded: by stating that no representations were made, by stating that there was no reliance on any representations, or by an express exclusion of liability for misrepresentations.
In essence, AXA Sun Life Services v Campbell Martin reaffirms the principle that entire agreement clauses, while powerful in defining the scope of contractual obligations, may not automatically exclude liability for prior misrepresentations. Clear and explicit language addressing misrepresentations is crucial for such exclusion to be effective.
