A Matter of Trust: Should No-Reliance Clauses Bar Claims for Fraudulent Inducement of Contract?

In this Article, Professor Allen Blair examines the enforceability of no-reliance clauses--contractual disclaimers designed to prevent parties from relying on extra-contractual representations to prove fraudulent inducement claims. Many courts are skeptical of such disclaimers and either refuse to enforce them or will enforce them only subject to substantial restrictions. These courts base their decisions on generic moral prohibitions against lying. This Article argues, however, that these courts reach their conclusion too easily. They presume that no-reliance clauses can serve no legitimate contract function and thus never provide value to parties. But, in at least some cases between sophisticated parties, no-reliance clauses can-and do-serve valuable contract functions. With the core assumption made by the majority of courts reluctant to enforce no-reliance clauses dispelled, this Article suggests that at least the generic formulations of a moral prohibition against fraud are insufficient to counterbalance the value gained by autonomous parties choosing what they rationally believe to be in their own best interests