Varying an existing agreement – entire agreement clauses and their effect on an underlying contract

Capgemini UK Plc v Dassault Systemes UK Ltd [2024] EWHC 2728 (Comm)

The question

Does an entire agreement clause that "supersedes and extinguishes all previous agreements…whether written or oral relating to its subject matter" within a settlement agreement have the effect of preventing all or any part of an underlying agreement from continuing to have effect?

The key takeaway

When formally varying or modifying an agreement, if the parties intend to dispose entirely of a previous or underlying agreement they should do so explicitly, rather than leave this to an entire agreement clause in the terms of the later agreement.

The background

Capgemini UK Plc (Capgemini) and Dassault Systemes UK Ltd (Dassault) are both providers of software and technology services and were engaged to create and provide a logistics planning software tool for the Royal Mail Group (RMG).

The underlying contract, the Prime Contractor Agreement (PCA), contained a long and detailed Statement of Work. Under the PCA, Dassault was required to test and tune the software. To do this it required test data from RMG. Some data was provided and Dassault performed the tests. Capgemini requested that Dassault test and tune the software against a larger dataset. A dispute arose between the parties as to whether this work was outside the defined scope, and formed part of a wider dispute involving Dassault's entitlement to additional payments.

To resolve the issue, the parties entered into the Settlement Agreement (SA), which settled the dispute for historic work and set out a way for the outstanding work. The SA contained an entire agreement clause:

"This Agreement constitutes the entire Agreement between the Parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter."

After signing the SA, there were subsequent delays in relation to the outstanding work, leading to Capgemini asserting repudiatory breach of the SA by Dassault. Dassault denied liability and relied upon the contractual obligations and limitations of liability within the PCA. Capgemini applied for summary judgment submitting that the PCA was a previous agreement that had been superseded and extinguished by the SA – Dassault could not rely on it, except for any specific clauses which had been expressly preserved.

The decision

The Judge did not consider the wording of the SA's entire agreement clause to simply have the effect of overriding the PCA. Entire agreement clauses are primarily aimed at ensuring that parties do not seek to rely on informal discussions and communications as tempering the meaning of the formal agreement, rather than aimed at dealing with the existence of multiple formal contracts between the parties.

For the purposes of this application, ultimately it was a matter of construing the words "relating to its subject matter" in the entire agreement clause. The Judge reasoned that it seemed more likely that the "subject matter" of the SA, was the settlement and the way forward as agreed in the SA, not the project generally. It was unlikely that the parties were intending to dispense with the PCA in the way suggested by Capgemini, or the scheme would not work. Therefore, the PCA continued to act as a baseline for the parties' substantive rights in relation to the outstanding work.

The SA addressed issues such as payment and working arrangements but was silent or limited when it came to certain key terms, including IP and confidentiality. While it was open to the parties to dispense with all of these protections when entering into the SA, why would they want to do so? The Judge was satisfied that there was a "respectable" argument that where the parties had agreed something in the SA, the entire agreement clause stopped them from contending that the meaning or effect of their agreement in the SA was tempered or modified by some oral term or prior agreement. But, if they had previously agreed something which was not covered by the SA, there was no inconsistency and it was not meaningful to refer to that separate agreement being "superseded" by the SA.

These matters were deemed to be unsuitable for summary determination – it would require a trial judge to determine these issues in full. The application was dismissed.

Why is this important?

The case confirms that clear drafting, particularly in the case of settlement agreements, is required to indicate whether all or part of a previous or underlying agreement is to continue in effect or be superseded by a later agreement.

Any practical tips?

When varying an agreement consider the impact of including boilerplate terms such as an entire agreement clause, and whether including such a clause will prevent key terms in any previous or underlying agreement from having effect or otherwise provide for contractual uncertainty.

Spring 2026