General Contract Provisions: Everything You Need to Know
General contract provisions are requirements including conditions in contracts like terms of payment, delivery, recommended measures against contract violation.3 min read
General contract provisions are requirements including standard conditions in contracts like terms of payment, terms of delivery, and recommended measures against contract violation.
Parties usually add boilerplate conditions to their contracts for the following reasons:
- For increased efficiency.
- Reducing money and time spent on drafting documents.
- To ensure that agreements are consistent with generally acceptable, contractual standards.
- To piggyback on the past experiences of others.
Misapplication of Boilerplate Provisions and Their Remedies
In some cases, companies or contracting parties add boilerplate clauses and other routinely used clauses to their contracts without thorough deliberations over their legal effects. Such an oversight is capable of leading to unforeseen disputes. In a bid to resolve such problems, courts might interpret unclear provisions in disfavor of the drafting party or completely remove such provisions.
To avoid unnecessary, time-wasting, and expensive disputes that can lead to the loss of rights, parties should do their due diligence, communicate, and negotiate enough to effectively draft clear contracts. By the way, “boilerplate” means reusable, standard language in written contracts.
Importance of Boilerplate Provisions
Boilerplate provisions are usually grouped together, but they usually don't have a lot in common with one another. They're grouped together because they don't seem to belong anywhere else in the contract. That's why contracting parties insert them at the bottom of the contract, under titles like “General,” “Miscellaneous,” or “Standard.”
Irrespective of being put at the end of contracts, boilerplate clauses are important. They cover the settling of disagreements and how courts interpret contracts. The ill effects of omitting boilerplate provisions are felt when, for instance, a contract doesn't say anything about awarding the winner of a court case attorney's fees, and when a contract violation occurs. In such a case, getting the services of a lawyer will be almost impossible.
List and Meanings of Some Boilerplate Provisions
The list below comprises some boilerplate terms and their meanings:
- Cost and attorney's fees: In case of a lawsuit, the defeated party has to pay for the winner's legal expenses.
- Arbitration: Resolving disputes without lawsuits.
- Jurisdiction: Filing a lawsuit in a country and state where the court has authority.
- Waiver: Giving permission to waive the right to take legal action against violating a particular condition without losing the right to future claims concerning that same condition.
- Severability: The ability to legally remove an invalid provision in a contract while still retaining the unaffected parts of the contract.
- Integration: A clause, which states that a written contract stands for the final agreement of the entities involved. Usually, it states clearly that the written agreement cancels all previous, unwritten versions, and that future changes are in writing.
- Attachments: This means there exhibits and attachments included as components of the contract.
- Notice: This spells out how each party should send notices to others, for instance, to cancel the agreement.
- Relationships: This keeps each party from claiming they have a business relationship with the other. For instance, neither party can say the other party is their partner or their employee.
- Assignment: This influences the party's ability to transfer or sell their rights under the contract to another party.
- Warranties: These are pledges or undertakings made by an entity in a contract concerning various contractual obligations.
- Escrow: This is a provision that places payments, confidential business information, and other contract-related valuables in a special depository that allows access to them only after meeting certain conditions.
- Force majeure: This represents natural disasters occurring It's the clause that excuses parties when they fail to honor their agreement as a result of unforeseen and uncontrollable events such as earthquakes, floods, hurricanes, and so on.
A standard form agreement provides for contractors to ask for a time extension or claim damages when the unfortunate force majeure setbacks occur. Apart from natural disasters, Force majeure occurrences may also be labor disagreements, shortage of materials, actions of government agencies, and other delay-causing events and factors.
Damages caused by contractor delays, in addition to basic costs, may include price escalations that could lead to increased expenses and a higher overhead. Knowing exactly what to do about general contract provisions can save a business or an individual contractor a ton of unnecessary contract-related hassle, waste of time, and loss of money.
Therefore, if you need help with general contract provisions, 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.