Contract Clauses Examples: Everything You Need to Know
Contract clauses examples can be useful when you are drafting a contract. 3 min read
Contract Clauses Examples
Contract clauses examples can be useful when you are drafting a contract. If you are unsure of which clauses should be in your contract, you may need to work with your attorney to ensure your contract is solid. Otherwise, your contract could not be enforceable in the eyes of the law.
What Is a Contract Clause?
A legal document is typically listed in sections for ease of navigation. Each section, segment, or paragraph are called clauses. They are used in different contracts, settlements, and other important legal documents.
Contract clauses are specific to certain aspects of the agreement. They are meant to define the rights and duties held by all parties in a contract. They are located in various sections of the contract, but are most commonly seen at the end. Clauses can cover just about any part of business dealings and provide coverage for commercial interests in a contract.
Non-disclosure clauses are commonly used in employment contracts, for instance. This clause protects the business from having their confidential information breached by employees.
A contract clause is enforced along with the entirety of the contract in the eyes of state and federal law.
What are Boilerplate Provisions?
“Boilerplate” is a term used to refer to the standardized language found in contracts. They are generally found in groups in the same section since they do not have anything in common with other parts of the contract. This is why you typically find them in a “miscellaneous” section in a contract.
Although boilerplate is found toward the end of a contract, it does not make them unimportant. They can have a profound impact on dispute resolution. It is most noticeable when boilerplate is not in a contract.
- Attorneys’ fees: If a legal dispute happens, the losing party will pay all attorneys’ fees and legal costs.
- Arbitration: Disputes regarding the contract must be dealt with in arbitration instead of a lawsuit.
- Choice of law: Should a dispute arise, the choice of law provision states which state laws will be used in a lawsuit.
- Jurisdiction: This clause will determine which state and county in which a lawsuit will be filed.
- Waiver: The parties to the contract can give up their right to sue for breaching a provision of the contract while not giving up potential claims to the same provision in the future.
- Severability: A court may take out any invalid provisions while keeping the remainder of the agreement in place. Without it, the whole agreement can be invalidated if one single provision is invalid.
- Integration: This clause states that a written agreement will be representative of the final contract with all parties.
- Attachments: This clause will guarantee that all exhibits and attachments are included in the agreement.
- Notice: A clause that discloses how all parties should provide notice to the other party.
- Relationships: Either party is prevented from laying claim to a business relationship with the other party.
- Assignment: This has an impact on the ability of the parties of the contract to transfer or sell their rights to the agreement to different parties.
- Force majeure: Also known as “Acts of God,” it is a clause that will state that the agreement can be suspended should disasters occur, such as a flood, hurricane, earthquake, and the like.
- Headings: The headings are used in the agreement and do not have any significance.
- Escrow: You can put your payments, trade secrets, and any additional information in a special account that is opened in specific circumstances.
- Jury trial waivers: This clause states that if a legal battle ensues, all parties will agree to have the issues heard by a judge while also giving up the rights to a trial by jury.
- Limitations on damages: This clause will place a limit on the different damages that can be awarded in a dispute.
- Warranties: This is a promise that both parties make with regard to different obligations in the contract.
- Confidentiality: This is an agreement whereby specific information will be characterized as confidential and prohibits the disclosure to anyone not privy to the contract.
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