Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] 2 Lloyd’s Rep 611; [2000] 3 EGLR 31
High Court, Chancery Division — 28 July 2000
Facts
Inntrepreneur granted East Crown a 30-year lease of the Prince Edward public house in Holloway in 1996. The lease contained a beer tie requiring the tenant to buy specified beer from the landlord’s nominated supplier. East Crown’s purchases from that supplier declined, and it bought none from April 1998 onwards.
Inntrepreneur sought an injunction to enforce the tie and damages for breach. East Crown alleged that, during discussions before the lease, the landlord’s representatives had promised to release the tie by 28 March 1998. It relied on this alleged collateral warranty and sought a declaration that the tie had ended.
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The landlord denied giving that warranty. It also relied on an entire-agreement provision in the agreement for lease: the parties had acknowledged that the written agreement constituted their entire agreement.
Issue
Could East Crown rely on an alleged promise made during negotiations as a binding collateral warranty despite that entire-agreement provision?
Decision
Lightman J found for Inntrepreneur. The entire-agreement provision prevented East Crown from relying on the alleged collateral warranty to escape the contractual beer tie.
Reasoning
The clause identified the written agreement as the source of the parties’ contractual obligations. Promises or assurances made during negotiations could not acquire contractual force as collateral warranties unless reflected in that agreement. The wording did not have to list every possible kind of side agreement to perform that function.
The point was contractual certainty. Without such a provision, a party might seek to add obligations by relying on remarks made during negotiations, potentially long after their context or precise wording had become difficult to establish. Here, the parties had agreed where their binding terms were to be found.
The distinction from misrepresentation
Lightman J expressly distinguished denying contractual force to an earlier statement from excluding a misrepresentation claim. A statement can fail to become a contractual promise while still being capable of amounting to a misrepresentation.
The decision therefore did not establish that every earlier representation becomes irrelevant whenever a contract contains an entire-agreement clause. The clause’s effect on the alleged collateral warranty was the relevant point: East Crown could not use that alleged promise to replace the beer tie contained in the written bargain.
