Key Takeaways

  • Boilerplate clauses govern how a contract functions in disputes, enforcement, and interpretation.
  • These clauses are often overlooked but carry significant legal weight.
  • Common clauses include choice of law, arbitration, indemnification, and severability.
  • Some lesser-known clauses like force majeure, notice, and assignment can impact enforceability.
  • Parties should carefully review and, if necessary, negotiate boilerplate terms.
  • Well-drafted boilerplate provisions can save money, streamline dispute resolution, and clarify obligations.

Boilerplate clauses are standard, ready-made, generic, reusable, legal clauses that are usually found at the bottom of a written contract (sometimes as fine print).

Ignoring Boilerplate Clauses Can Result in Trouble

Sometimes, the written terms or conditions of a contract are overwhelmingly lengthy. As a result, people end up agreeing to unfavorable terms or conditions without reading them thoroughly. It's, however, strongly advised that you thoroughly review the details of a written agreement when you enter into a contract with another party.

Common Misconceptions About Boilerplate Language

Boilerplate clauses are often mistakenly viewed as mere formalities with no real impact. This misconception can lead to serious legal issues down the road. Many parties assume these provisions are non-negotiable or inconsequential, but they can shape the outcome of disputes, especially when standard terms differ in their interpretation across jurisdictions.

For example, a jurisdiction clause may significantly increase litigation costs if it requires parties to file suit in an inconvenient or unfamiliar venue. Similarly, a poorly drafted indemnity clause may shift liability in unexpected ways. Always read these clauses as closely as the business terms of the agreement.

Don't Think They're Not Important

Boilerplate provisions, which are standard components of contracts, protect the interest of the parties involved in a contract. Boilerplates are usually grouped together, but they mostly don't share a lot of common ground with one another. They're put together at the bottom of a contract because that's where they fit best. You'll normally find them under such titles as “Standard,” “Miscellaneous,” or “General.”

Though virtually every contract has a boilerplate clause, there are variations in the legal wording of the clauses. They aren't perceived as being of equal importance as other terms of the contract, but they're no less important. Boilerplate clauses help parties better define their relationship because they provide clarity when a dispute arises.

Why Boilerplate Clauses Are Legally Binding

Even though boilerplate clauses appear at the end of a contract, courts treat them as enforceable components of the agreement. These clauses often define how key legal processes—like amendments, breach remedies, or dispute resolution—are handled. Their placement does not affect their authority, and failing to honor them can result in breach-of-contract claims.

Omitting Boilerplate Clauses Can Backfire

If boilerplate clauses are deliberately omitted from a contract, they'll be missed most when things go wrong. For example, if a contract doesn't provide a boilerplate clause that covers awarding attorney's fees to the winner of a lawsuit or a breach of contract happens, the contending parties will have a hard time finding lawyers to hire. They also come with advantages such as protection against expensive legal fees, protection against unforeseen circumstances beyond the parties' control, and so on.

Consequences of Poorly Drafted or Missing Boilerplate Clauses

Boilerplate clauses that are vague, outdated, or entirely missing can leave a contract vulnerable to misinterpretation or costly litigation. Without a clear severability clause, one invalid term could potentially void the entire agreement. Omitting a force majeure clause might expose a party to liability for delays caused by natural disasters or pandemics.

In addition, failing to define how notices must be sent (e.g., by email or certified mail) can create confusion when trying to enforce or terminate a contract. These clauses serve as a legal safety net—removing them removes a layer of protection.

A List of Boilerplate Provisions and What They Mean

Below are some boilerplate provisions and their meanings:

  • Cost and attorneys' fee: The legal fees paid by the loser of a lawsuit for the winner.
  • Arbitration: Resolving a disagreement without legal action. This is a clause that can save legal fees for you because, during a dispute, an independent arbitrator is available to look into disputes and decide compensation.
  • Choice of law: This is the law of a chosen state applied to a lawsuit.
  • Jurisdiction: This clause states what country and state a lawsuit must abide by.
  • Waiver: This is the right a party retains not to take legal action against a defaulting party while maintaining the right to do so should the other party default at some point.
  • Severability: This means instead of completely terminating a contract, only removing the invalid clause or rendering unenforceable by a court while the unaffected parts of the contract stay intact.
  • Integration: This is also known as entire agreement clause. It states that the contract is the complete agreement of all contracting parties concerning the subject of the contract.
  • Attachment: This states that the contract will include exhibits and attachments.
  • Escrow: This allows a party to keep payments, business secrets, and other contract-related valuables in the custody of a qualified third-party that allows access to them only after meeting certain conditions.
  • Limitations on damage: This determines what kinds of damages a contract is liable to award in case of a dispute.
  • Warranties: These are the promises of parties concerning various contractual duties.
  • Indemnity: This is the guarantee by one party that it will take care of the cost of certain challenges by third parties who aren't parties to the contract.
  • Confidentiality: This states that parties won't reveal certain information.
  • Announcement: This defines how parties should communicate public information concerning the contract such as an expected merger or a joint venture.
  • Counterparts: This is when a separate, physical copy of a document, other than the one signed by other parties, gets signed by a party. This is an exact opposite of when the same copy of a document gets signed by all parties.
  • Amendments: This is a clause that protects parties from having a contract amended without their consent. It states that a contract is only amendable only after the written consent of affected parties.

Additional Boilerplate Clauses to Consider

Beyond the standard provisions, several other boilerplate clauses play crucial roles in protecting the parties' interests. These include:

  • Force Majeure: Suspends obligations due to events beyond the parties’ control, such as natural disasters, war, or pandemics.
  • Assignment Clause: Determines whether a party can transfer its rights or obligations to another entity. Restrictive language may require written consent.
  • Notice Clause: Specifies how communications related to the contract must be delivered (e.g., via email, postal mail, courier).
  • Relationship of the Parties: Clarifies that the contract does not establish a partnership, joint venture, or employer-employee relationship.
  • Headings Clause: States that the headings in the contract are for reference only and do not affect the interpretation of the clauses.
  • Jury Trial Waiver: Where permissible by law, this clause ensures that disputes will be heard by a judge rather than a jury.
  • Survival Clause: Ensures that specific obligations (like confidentiality or indemnity) remain in effect even after the contract ends.

Each of these boilerplate clauses in a contract serves to reduce ambiguity, establish legal clarity, and streamline resolution in case of a dispute.

Frequently Asked Questions

  1. What are boilerplate clauses in a contract?
    Boilerplate clauses are standardized legal provisions typically found at the end of a contract. They govern enforcement, dispute resolution, and other procedural elements.
  2. Why are boilerplate clauses important?
    Though often overlooked, they determine how legal issues are handled, such as which law applies, where disputes are resolved, and what happens if part of the contract is invalid.
  3. Can boilerplate clauses be negotiated?
    Yes. While they are often standard, parties can negotiate or modify boilerplate provisions to better reflect their needs and risk tolerance.
  4. What happens if a contract lacks boilerplate clauses?
    Without these clauses, a contract may be harder to enforce, interpret, or defend in court. Critical legal protections may be missing.
  5. How can I ensure my boilerplate clauses are effective?
    Consulting an attorney ensures these clauses are properly drafted and aligned with your jurisdiction's laws. UpCounsel can connect you with experienced attorneys for contract review.

If you need help with boilerplate clauses, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.