Axa Sun Life Services Plc v Campbell Martin Ltd [2011] EWCA Civ 133

AXA appointed financial advisory businesses as its representatives under standard form agreements. It later claimed repayment of allowances and commission. The representatives alleged that AXA had made misleading statements and collateral promises, and had breached implied obligations. AXA relied on an entire agreement clause, a restriction on set-off and a clause making its financial certificates conclusive except for manifest error. The litigation raised preliminary questions about whether those provisions prevented the representatives from advancing their defences and counterclaims. It also raised the application of statutory reasonableness controls to the standard terms.

Did the contract terms prevent D from relying on counterclaims of misrepresentation, breaches of warranties and implied terms? Even so, were the contract terms void for unreasonableness under the Unfair Contract Terms Act 1977?

The Court of Appeal distinguished the different functions of the clauses. The entire agreement clause excluded collateral warranties, but did not exclude liability for misrepresentations. Its language identified the parties' agreement rather than clearly removing remedies for false statements. Terms genuinely implied to give the agreement business efficacy were also not excluded by that clause.

The court considered the separate restrictions on set-off and the conclusiveness of AXA's certificates under the Unfair Contract Terms Act 1977. The restriction on set-off failed the reasonableness test, whereas the other challenged provisions survived the relevant assessment. These were decisions on preliminary issues, not a final finding that every allegation of misrepresentation or contractual breach had been proved.

An entire agreement clause does not necessarily exclude liability for misrepresentation. Its effect depends on its language and contractual context. Excluding collateral warranties, excluding misrepresentation remedies and excluding terms implied into the agreement are distinct questions; applicable statutory controls must also be considered.

AXA is useful when a problem combines an entire agreement clause with allegations about pre-contract statements. It prevents the assumption that identifying the written contract as the complete agreement also removes all liability for misleading inducements. First Tower Trustees v CDS later emphasised that a clause operating to exclude misrepresentation liability is subject to the statutory reasonableness control, even where drafted as a statement of non-reliance. Construction therefore precedes, but does not replace, scrutiny of statutory validity.