Non-reliance clause

What is a non-reliance clause?

A non-reliance clause is a statement by one party that it signed the contract based only on what the contract itself says. It confirms that the party did not rely on anything else the other side said or showed it: sales pitches, management presentations, forecasts, emails or documents in a data room.

Example: a buyer acquires a company’s assets. The seller’s pitch deck promised strong growth, but the purchase agreement makes no promise about revenue. With a non-reliance clause, the buyer has confirmed that it relied on its own investigation and on the representations written into the agreement, not on the pitch deck. If growth never comes, the buyer cannot sue over the deck.

It is also called a no-reliance clause, an anti-reliance clause or a reliance disclaimer.

Why parties use a non-reliance clause

Before a deal is signed, people say and share a lot: estimates in meetings, spreadsheets in a data room, answers to questions over email. Most of it is never checked as carefully as the contract. A non-reliance clause draws a line:

• The seller or provider limits its exposure to what it actually promised in writing. Claims over informal statements, such as misrepresentation or fraud claims, become much harder.
• Both parties get a contract that can be read on its own, without a dispute over who said what before signing.
• The relying party is pushed to put every promise it needs into the contract as a representation or warranty, where it is enforceable.

Non-reliance clause vs. entire agreement clause

The two often sit side by side in the boilerplate, but they do different jobs.

An entire agreement clause (also called an integration clause) on its own is usually not enough to stop a fraud claim based on statements outside the contract. Courts in Delaware, for example, look for a clear statement from the relying party itself that it did not rely on them.

Are non-reliance clauses enforceable?

Generally yes, between business parties, but courts read them strictly and the rules differ by jurisdiction.

• United States (Delaware). Delaware courts enforce a clearly drafted non-reliance clause against claims, including fraud claims, based on statements made outside the contract. They do not let it protect a party that lied in the contract’s own representations: in Abry Partners v. F&W Acquisition (Del. Ch. 2006), the court refused to enforce a limit on liability for intentional misstatements in the written representations. The clause also has to be written from the point of view of the party giving up the claim. A general integration clause is not enough.
• England and Wales. A non-reliance clause that excludes liability for misrepresentation must meet the reasonableness test under section 3 of the Misrepresentation Act 1967. In First Tower Trustees v. CDS (Superstores International) (2018), the Court of Appeal held that a blanket non-reliance clause in a lease failed that test.

Other jurisdictions have their own rules, so check the law that governs your contract.

Where non-reliance clauses appear

The sample clauses above come from the most common settings:

1. Purchase agreements. The buyer confirms it relied on its own due diligence and on the seller’s written representations only. These clauses often name the data room, projections and management presentations.
2. Investment and subscription agreements. The investor confirms it did not rely on statements by the placement agent or other investors.
3. Syndicated loans. Each lender confirms it made its own credit decision and did not rely on the agent bank or the other lenders.
4. Employment, separation and settlement agreements. The employee confirms that no promises were made beyond the written agreement.
5. Derivatives and trading agreements. Each party confirms it is not treating the other’s explanations as investment advice.

What is a non-reliance letter?

A non-reliance letter is a separate short agreement signed before someone gets access to a report that was written for someone else. It is common in due diligence: a buyer, lender or bidder wants to read a financial due diligence report, a valuation or an environmental report that the seller or the bank commissioned.

The firm that wrote the report agrees to share it only if the reader signs a non-reliance letter. In it, the reader typically:

• confirms the report was prepared for the original client, not for it
• agrees that it will not rely on the report and that the author owes it no duty of care
• releases the author from claims based on the report
• agrees to keep the report confidential and not pass it on

A reliance letter does the opposite: the author allows a named third party to rely on the report, usually for a fee and with a cap on liability. Lenders often ask for one.

How to review a non-reliance clause

If you are the party giving up the claims:

• Put every promise you rely on into the contract. Revenue figures, customer numbers, the condition of an asset: if it matters, ask for a representation or warranty.
• Check what the clause names. “Any statement” is broad. Clauses that name the data room, projections and forecasts are broader still.
• Keep a fraud carve-out where you can. Ask that nothing in the clause limits claims for fraud, or at least for fraud in the written representations.
• Check who is covered. Some clauses also protect the other side’s officers, advisers and affiliates.

If you are the party relying on it, make sure it is written from the other party’s point of view (“Buyer acknowledges that it has not relied …”), names the kinds of information you shared, and works together with the entire agreement clause rather than replacing it.

Non-reliance clause example

Catching a one-sided reliance disclaimer

A non-reliance clause usually arrives in the other side’s first draft, buried in the boilerplate near the end. In fynk, AI Review compares the draft with your playbook and points out a disclaimer that is one-sided or has no fraud carve-out. You then propose the change as tracked redlining in the same document, so the counterparty sees exactly what you changed.

Which contracts include a non-reliance clause?

Asset and share purchase agreements, merger agreements, real estate purchase contracts, subscription and investment agreements, credit agreements, separation and settlement agreements. These free templates include one:

Related clauses

• Entire agreement The "Entire Agreement" clause asserts that the written contract constitutes the complete and final agreement between the parties, superseding any prior discussions, negotiations, or agreements. It ensures that no other verbal or written agreements outside the contract will affect or modify its terms unless formally amended in writing.
• Integration clause An integration clause, also known as a merger clause, ensures that the written contract represents the complete and final agreement between the parties by superseding all prior negotiations, discussions, or agreements, whether written or oral. This clause prevents any party from claiming that external statements or documents should be considered part of the agreement, thus providing clarity and reducing potential disputes.
• Representations and warranties "Representations and warranties are contractual statements made by one or both parties, asserting certain facts and conditions as true at the time of the agreement. These affirmations serve to allocate risk and establish grounds for potential legal remedies if the assertions prove to be false or misleading."
• As is purchase An as-is purchase means the buyer accepts the property or goods in their current condition, with all faults, and the seller makes no repairs and gives no warranties about quality. It does not let a seller hide known defects or skip disclosures the law requires.
• Due diligence period The due diligence period in a contract is a designated timeframe during which the buyer is allowed to thoroughly inspect and evaluate the property or assets involved in the transaction. This period aims to ensure the buyer can identify any potential issues and make informed decisions before finalizing the agreement.
• Survival A survival clause ensures that certain provisions of a contract continue to be enforceable even after the agreement has been terminated or expired. This clause typically includes obligations such as confidentiality, indemnification, and dispute resolution, which may be necessary to uphold beyond the contract's end date.

Frequently asked questions

• What does non-reliance mean in a contract?

  That a party signed based only on what the contract says. It confirms it did not rely on other statements, forecasts or documents from the other side, which makes claims based on those statements much harder.

• Is a non-reliance clause the same as an entire agreement clause?

  No. An entire agreement clause says the written contract replaces earlier agreements. A non-reliance clause is a statement by one party that it did not rely on anything outside the contract. Contracts often need both.

• Does a non-reliance clause protect against fraud claims?

  Against fraud claims based on statements outside the contract, often yes, if it is clearly drafted. It does not usually protect a party that lied in the contract's own representations. The rules depend on the governing law.

• What is a non-reliance letter?

  A short agreement signed before getting access to a report written for someone else, such as a due diligence or valuation report. The reader agrees not to rely on the report and releases its author from claims.

• What is the difference between a reliance letter and a non-reliance letter?

  A reliance letter allows a named third party to rely on a report, usually with a cap on the author's liability. A non-reliance letter gives access to the report but rules out any reliance on it.