Boilerplate Provisions in Contracts
Boilerplate provisions in contracts are important components in any agreement and it refers to standard language in contracts.3 min read
Boilerplate provisions in contracts are important components in any agreement. The term boilerplate refers to standard language in contracts. In essence, it is text that can be reused in a new context or application without being wholly changed from the original text. With that, detailed drafters need to ensure that the provisions will not undercut agreements or lead to abrupt consequences.
Although boilerplate provisions could be lumped in together, the provisions have little similarities with the other, only that they do not fit anywhere in the agreement itself. Further, the provisions are meant to sum up the understanding between all parties, after everyone has agreed to the primary contract terms.
Note: Boilerplate provisions should be included at the end of the contract.
For instance, the provisions could be included in the following sections:
Many feel that such provisions are not important because they are included at the end of the agreement, and many do not pay attention to or read to the text. However, such provisions are vital because they pertain to your legal rights in the same manner as other contract provisions. In addition, they determine how potential disputes could be resolved and how courts enforce the contract in the event of legal wrangling.
Boilerplate ramifications are mostly noticed when it’s not included in a contract. For example, contracts that do not include a provision that awards attorney fees to winners of a dispute are problematic because it can be hard to find a lawyer that will accept the case. This is because such wording was not included, even though a party is in breach of the contract.
Importance of Boilerplate Provisions
The primary aim of boilerplate provisions is to save drafters and parties the trouble and time with language that’s commonly understood and used. Moreover, the provisions enforce your rights within the contract and may either deduct or establish vital rights. The language is meant to save additional time by regarding common meanings, but it is worth noting that the impact and meaning of such provisions are vital to the contract itself.
Even though boilerplate terms are standard, they can still be tailored according to contract requirements. Each clause of the contract must be negotiated, including the boilerplate provisions. With that, not every single boilerplate provision needs to be in the contract. You should include important provisions, and you can determine the important provisions according to the transaction type outlined in the contract.
Boilerplate provisions should include:
- Rules on Agreement Interpretation
- Rules Governing the Subject Matter of the Contract
- Contingencies if a Court Deems Certain Provisions Invalid
- If Third Parties would Benefit from the Agreement
If a legal dispute occurs, losing parties must pay attorney fees. Shifting fees is a popular way to deter further litigation in the future. Parties tend to find other avenues of settling legal disputes if they must pay attorney costs and fees.
However, an agreement clause mandates that the contract is complete and final, preventing claims that certain provisions or terms were not included in the contract. This may include such things as:
- Oral Statements
- Other Documents
Counsel should ensure that all terms are included in the agreement due to the fact that terms located outside of the agreement will not be enforceable. In addition, counsel needs to include statements that neither party relied on a representation or pre-contract statement.
Conflicts should be resolved via arbitration guidelines and not in the courtroom. Further, arbitration boilerplate provisions should assign binding agreements that include:
- Binding Terms of Arbitration
- Arbitrator Name
- Rules and Guidelines
- Location of Arbitration
The great thing is that parties can tailor arbitration provisions to everyone’s liking and can establish a world in which conflicts are settled with no need for legal proceedings.
In addition, arbitration can come in many forms and variables. Such variables can be:
- Administrator choices in the form of a commercial administrator, or lack thereof
- Arbitrator numbers (including fields of expertise, and why they were chosen)
- Fee Shifting Agreements
- Matters to be Discussed
- Trial Limitations
- Awards and Award Formats
- Award Confirmations
For more information on boilerplate provisions in contracts, submit your legal inquiry to our UpCounsel marketplace. UpCounsel attorneys will give you the guidance you need in establishing a solid contract that all parties can agree to and understand. Further, our attorneys will help you include key boilerplate provisions to prevent potential legal disputes in the future.