I am working on the following assignment and have some questions regarding the information that is needed for my answer.

What would the benefit of including an integration clause have?

What is meant by the type of language that would be recommended to include in the clause?

What are some of the risks that could be eliminated by including the clause?

You are a senior executive of Castleworth Energy Development, LLC (CED LLC).Its primary asset is a biowaste energy plant that has achieved an output rating of 20,252,134,000 kWhs.

CED LLC has provided full access to the plant to engineers for global energy operator Duke Power Corp. (DPC) as part of a four-month due diligence period. You are negotiating an asset purchase agreement to allow DPC to purchase the power plant.

You work with your legal counsel to manage the transaction and report to the Managing Member of CED LLC, Cael Castleworth. Mr. Castleworth may have mentioned the long-term prospects of the plant and its output to the CEO of DPC in the early negotiations of the transactions to justify the purchase price. DPC provided a draft asset purchase agreement that

• proposed that CED LLC provide an express representation and warranty that the plant will meet a minimum 20,200,000,000 kWhs output standard for a period of seven years, and
• did not include an integration clause.

You negotiated successfully to remove the proposed representation and warranty of any minimum kWhs output standard. You noted the extensive due diligence period and noted that plant performance will depend on operational decisions such as fuel quality that can vary and that will be out of CED LLC's control. You privately doubt that the DPC operational team will have the skill to operate above 18,000,000,000 kWhs, but you wish them well.

The only remaining issue to finalize the asset purchase agreement is whether to insist on including an integration clause.