National Real Estate Exam (PSI)ContractsHard
A signed purchase agreement contains a clause stating that the written document represents the entire agreement between the parties and supersedes all prior negotiations, discussions, or promises. What is this clause called?
- AContingency clause
- BSubordination clause
- CMerger clause
- DAcceleration clause
Show answer & explanationAnswer & explanation
Correct answer: C. Merger clause
A merger (or integration) clause states that the written contract represents the complete and final agreement between the parties, effectively merging all prior oral or written negotiations into the final document.
Why the other options are wrong
- A. A contingency clause makes performance conditional on a future event, not related to merging prior agreements.
- B. A subordination clause ranks the priority of liens, not the completeness of a contract's terms.
- D. An acceleration clause allows a lender to demand full payment upon default, unrelated to this scenario.
Merger Clause
A contract provision stating the written document is the complete and final agreement, superseding all prior oral or written negotiations and promises.
- Also called an integration clause
- Prevents parties from claiming outside promises are part of the deal
- Common in purchase agreements and leases
Memory trick: Merger clause merges all talk into one final page.