Today’s blog looks at boilerplate clauses in commercial agreements.
The role of a boilerplate clause
As lawyers we work on a huge variety of transactions, but all of them will in some way involve written agreements. Many if not all of those agreements should contain some boilerplate clauses.
“Boilerplate” is the term used to describe the clauses that are included in an agreement to deal with the mechanics of how it works and those legal points that are relevant to most transactions. In the 19th century, a boilerplate referred to a plate of steel used as a template in the construction of steam boilers. These standardized metal plates reminded editors of the often trite and unoriginal work that ad writers and others sometimes submitted for publication. The legal profession began using the term as early as 1954 when an article in the Bedford Gazette criticized boilerplates because they often included fine print designed to skirt the law.
Boilerplate clauses are generally found at the beginning and the end of an agreement. Such clauses are often thought of as standard, miscellaneous provisions, but this is a very dangerous view to adopt. It is not unusual for a boilerplate clause to be the cause of litigation. Since a boilerplate clause will deal with issues such as the interpretation, validity and enforcement of an agreement, it can have a significant impact on the other clauses in an agreement and on an agreement as a whole. It is important that any such impact is intentional and not the result of a boilerplate clause being included in an agreement with little thought.
It is key when drafting or reviewing an agreement to carefully consider each boilerplate clause that has been included in it:
- to ensure that its inclusion is appropriate in the context of the transaction
- to ensure that its scope is appropriate in the context of the transaction
- to understand what the position of the parties would be under the general law if the boilerplate clause were not included, and
- to understand how the position of the parties under the general law is altered by the inclusion of the boilerplate clause
It is also very important to consider whether there are any boilerplate clauses that should be included in the relevant agreement, but have been omitted.
Common examples of boilerplate clauses cover, for example:
- Parties clauses which identify the parties to the agreement
- Background clauses
- Definitions and interpretation clauses
- Commencement and term clauses
- Compliance with law and regulation clauses
- Confidentiality clauses
- Announcements clause
- Assignment clauses
- Costs and expenses clauses
- Joint and several liability clauses
- Limitation of liability clauses
- Rights and remedies clauses
- Exclusive remedies clauses
- Dispute resolution clauses
- Set-off clauses
- Equitable relief clauses
- Health and safety clauses
- Equality and diversity clauses
- Time of the essence clauses
- Force majeure clause
- Waiver clauses
- Further assurance clauses
- Entire agreement clauses
- Survival of completion clauses
- Survival of termination clauses
- Variation clause s
- Severance clauses
- Conflict with other agreements clauses
- Conflict within an agreement clauses
- Notices clauses
- Rights of third parties clauses
- Language clauses
- Process agent clauses
- Counterparts clauses
- Governing law clauses
- Testimonium clauses
For further information on any aspect of contract or commercial law including drafting contracts and commercial agreements for your business, why not contact one of Alexander JLO’s expert contract or commercial lawyers and see what we can do for you?