Florida Building Contractor Business/Finance Practice Exam

What does a "complete agreement" clause in a contract imply?

1. The contractor and owner are bonded by external documents

2. The contractor and owner are bound by the exact words of the document

3. The contractor retains the right to amend the contract

4. Only agreed terms are enforceable

The correct answer is: The contractor and owner are bound by the exact words of the document

A "complete agreement" clause in a contract, commonly referred to as an integration clause, indicates that the written document represents the final and complete expression of the agreement between the parties involved. This means that any previous discussions, negotiations, or documents that are not included in the written contract hold no legal weight. When it states that the contractor and owner are bound by the exact words of the document, it reinforces the principle that the contract should be interpreted solely based on what is written within it, without reference to external agreements or discussions not included in the final text. This is crucial in construction contracts, as it provides clarity and reduces ambiguity about the parties’ intentions and obligations. The other options do not accurately reflect the purpose of a complete agreement clause. For instance, the option about being bonded by external documents contradicts the very purpose of such a clause, which is to limit binding obligations to what is expressly stated in the contract. The option regarding the right to amend the contract misrepresents the intent of a complete agreement clause, as typically, such amendments would also require written consent and should be incorporated into the contract itself. Lastly, the idea that only agreed terms are enforceable does not encapsulate the essence of a complete agreement clause, which emphasizes