Key Takeaways

  • A boilerplate document refers to standardized contract clauses that often appear at the end of legal agreements.
  • While boilerplate clauses save time and ensure consistency, they can pose risks if copied without customization.
  • Common clauses include severability, governing law, dispute resolution, force majeure, waiver, amendments, and entire agreement provisions.
  • Risks arise when clauses conflict with local laws, contradict main contract terms, or are unsuitable for the specific business context.
  • Boilerplate language is also used outside legal documents (e.g., press releases, company descriptions) to ensure consistency and efficiency.
  • Businesses should review boilerplate documents carefully and adapt them to their specific needs to avoid enforceability issues or unintended liabilities.

Boilerplate legal documents refer to the terms and clauses listed at the end of legal documents (most often, corporate legal documents). Boilerplate clauses are also known as general clauses, standard clauses, or miscellaneous clauses.

These legal provisions cover a range of potential issues, such as how disputes will be resolved, the process to follow if a contract is claimed to be unenforceable, which laws apply to the agreement, and more. In addition to providing instructions on how to act in various situations, boilerplate clauses define the relationship between the parties.

Boilerplate clauses are often overlooked thanks to their use of standardized language and their location at the very end of the agreement. However, these provisions are just as important as the rest of the terms. Read boilerplate clauses carefully and thoroughly.

Common Boilerplate Terms and Clauses

Below are some contractual provisions commonly used within the boilerplate section of a legal agreement:

  • Severability - If part of your agreement is illegal or invalid, a severability clause (also known as a savings clause) will maintain that the rest of your contract is still valid. Without such a clause, the entire contract could be thrown away if just one part of it is considered unenforceable or invalid.
  • Jurisdiction or governing law - This clause states which jurisdiction or governing law applies to the agreement, and where a lawsuit will be filed if disputes come up.
  • Dispute resolution - Any contract involving at least two parties will have a dispute resolution clause to state how potential disputes will be resolved. The clause might even designate the preferred method of dispute resolution, such as mediation, negotiation, or arbitration, the latter of which has gained much popularity thanks to its fast and informal way of resolution.
  • Force majeure - This type of clause states that if the contracts are unable to complete their contractual duties owing to circumstances out of their control, their responsibilities may be either temporarily suspended or completely excused. A force majeure clause may include specific examples, such as floods, strikes, war, and other disasters that would make fulfilling contractual duties impossible.
  • Waiver - Waivers are often overlooked, but they contain an important element of the agreement. A waiver clause states that if a party does not enforce part of the contract, such as charging a returned check fee, they may still do so sometime in the future.
  • Amendment - An amendment clause describes how the contract may be modified or changed. In general, such clauses require that any changes must be written and signed by all parties.
  • “Time is of the essence” - When these words are included within a contract, it means that the contract's timelines are considered essential to the agreement. If a party does not satisfy the contractual timeline and any required deadlines, the other party may rescind the contract.
  • Assignment - This type of clause states whether a party can transfer their contractual obligations or rights to another party. An assignment clause may include exceptions, such as if the assignment may only be performed with the other party's permission.
  • Headings - This type of clause simply expresses that bold headings used within the document are only for organizational purposes. Often, headings are an oversimplified summary of the context and should not be used to discern the actual clause terms.
  • Counterparts - This clause will be included in a contract if two or more parties intend to sign separate copies of the same legal document. Typically, this occurs when parties are unable to meet in the same place at the same time. A counterparts clause is often stated as “This agreement (or contract) may be executed in counterparts.”
  • Notice - A notice clause explains how each party will provide notice to the other. It may include the form of notice (e.g. written), the method of delivery, and when it is considered received.
  • Entire agreement - This type of clause may be very important when negotiations are ongoing. It states that any prior understandings of the agreement, including other oral and written agreements, are not included within the current contract. If a contract includes an entire agreement clause, each party must ensure that anything and everything they wish to be included in the deal is detailed within the current contract itself.

Pros and Cons of Boilerplate Clauses

Boilerplate provisions carry both advantages and disadvantages:

Advantages

  • Promote consistency across multiple contracts.
  • Save time by avoiding the need to draft new language for routine issues.
  • Reflect well-tested terms that have been interpreted by courts.

Disadvantages

  • Risk of being overlooked due to their location at the end of agreements.
  • May include outdated or irrelevant provisions if not updated.
  • Could impose obligations that do not reflect the parties’ actual intentions.
  • May be challenged in court if deemed ambiguous or overly broad.

Ultimately, while boilerplate language is useful, contracts are strongest when these clauses are carefully reviewed and customized.

Beyond Contracts – Other Uses of Boilerplate

The concept of boilerplate extends beyond contracts. In business communications, a boilerplate document often refers to a standardized company description or statement used repeatedly in press releases, investor materials, or websites.

Key purposes include:

  • Consistency: Ensuring the same company message is shared across all communications.
  • Efficiency: Saving time by reusing approved language.
  • Professional branding: Presenting a polished, uniform description to the public.

For example, a company’s boilerplate paragraph at the end of a press release typically includes its mission, founding date, headquarters, and a summary of its services. While not legally binding like contract boilerplate, these statements also benefit from careful drafting, as they shape brand identity and public perception.

Risks of Using Boilerplate Documents

Although boilerplate clauses are standardized, using them without tailoring to the contract’s context can create significant problems. Common risks include:

  • Legal conflicts: A boilerplate clause might contradict local law, making it unenforceable. For example, a governing law provision selecting one jurisdiction may not hold up if mandatory consumer protection rules apply elsewhere.
  • Contradictions within the agreement: Standardized clauses may unintentionally override or conflict with key negotiated terms.
  • Overbreadth: Some clauses, such as waiver or indemnification provisions, may expose a party to greater liability than intended if used without revision.
  • Inflexibility: Standard force majeure language may not cover modern risks like cybersecurity incidents or pandemics unless explicitly updated.
  • False security: Parties sometimes assume boilerplate provisions protect them in all scenarios, when in fact, courts may interpret ambiguous or outdated clauses narrowly.

To reduce these risks, parties should review each boilerplate clause in light of the specific transaction and jurisdiction.

Frequently Asked Questions

  1. What is a boilerplate document?
    A boilerplate document contains standardized legal or business language that is commonly reused across contracts or communications.
  2. Why are boilerplate clauses important in contracts?
    They provide structure for dispute resolution, governing law, amendments, and other critical issues often overlooked during negotiations.
  3. What risks come with using boilerplate documents?
    Risks include enforceability issues, conflicts with local laws, and unintended liabilities if clauses are copied without review.
  4. Do boilerplate documents apply only to legal contracts?
    No. The term is also used in business communications, such as company descriptions in press releases.
  5. Should I customize boilerplate clauses?
    Yes. Customization ensures that the terms fit your specific transaction, industry, and jurisdiction. Standard language should never be used blindly.

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