Why This Sifter Matters: “Not Relying on Statements Outside the Contract”

LegalSifter Review uses algorithms to review draft contracts to see whether provisions addressing specific contract issues are present or missing. We call our algorithms “Sifters.” In this post, the spotlight is on the Sifter Not Relying on Statements Outside the Contract.

This Sifter helps alert sellers to language it would be prudent to include in a contract to reduce the chances of being the target of a claim for fraud. Allow me to explain.

This post is on LegalSifter’s blog. To read the rest of it, go here.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

1 thought on “Why This Sifter Matters: “Not Relying on Statements Outside the Contract””

  1. The issue I see here is that a facially adequate provision may be inadequate because of background law, however absurd.

    If in Texas or other places affirming that extracontractual statements don’t exist permits later tort claims that they did exist, the drafter’s challenge is to know the relevant background law and to draft in its light.

    Since it would be silly to draft a provision that amounts to saying ‘no extracontractual statements exist, but if they do, no party is relying on them’, one might choose to dump the nonexistence provision and go with just a no-reliance provision.

    That doesn’t solve the underlying need for the drafter to know all relevant background law. For example, if a jurisdiction holds that ‘fraud vitiates everything’, a no-reliance provision might be as ineffective as a nonexistence provision to block a fraud claim.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.