A guide to Boilerplate Clauses
What are boilerplate clauses?
Boilerplate clauses are standardised provisions usually found at the beginning or end of a contract (including terms and conditions). While they do not address the core “deal” (such as price or specific services), they are essential for regulating how the contract operates, how it is interpreted, and how disputes are handled.
When a contract becomes ‘too long’ or otherwise needs slimming down, it is the boilerplate clauses that are often scrutinised, removed or amended. However, by doing this, there is a high risk that the legal impact of the clause is significantly altered.
In this article, we look at some common boilerplate clauses and consider why it is important to have them.
Why are boilerplate clauses needed?
Boilerplate clauses are a useful tool to mitigate risk. They protect parties from legal “surprises” by defining exactly how the relationship between them is managed. Importantly, these clauses provide a predictable framework for courts to follow if a dispute arises.
While the main terms of a contract cover what is being traded, boilerplate clauses define how the agreement is managed, especially when things go wrong (e.g. by expressly stating which law shall govern the agreement).
Example clauses
Some common examples of boilerplate clauses, and why they are used are set out below:
- Entire Agreement: Confirms that the written document contains the entire agreement, preventing parties from relying on previous oral or written promises not included in the final text. As an example, it prevents a party from later claiming that an oral promise made during a lunch meeting is part of the deal.
- Severability: A severability clause acts as a safety net; if one small part of your contract is found illegal, the rest of the deal remains valid rather than the entire document becoming void.
- Governing Law & Jurisdiction: Specifies which country’s or state’s laws apply to the contract and which courts will hear any legal disputes. Without these clauses, a simple dispute could turn into a costly battle over where and how to fight
- Force Majeure: Relieves parties of liability if they cannot fulfil their obligations due to “acts of God” or extreme unforeseen events like natural disasters. Under English law, there is no automatic right to be excused from a contract due to unforeseen disasters like pandemics or wars. Without this boilerplate, you may be held in breach even if performance is impossible.
- Notices: Sets the formal rules for how parties must communicate official information (e.g., via email, registered mail, or specific addresses). By defining exactly how a “formal notice” must be delivered, parties avoid arguments over whether an important message was actually received.
- Assignment: Controls whether a party can transfer their rights or duties under the contract to a third party. Without an express assignment clause, the default legal position under English law is that a party is generally free to assign its benefits (such as the right to receive payment) to a third party without the other party’s consent.
- Waiver: If you allow your counterparty to pay late once without a penalty, a “no-waiver” clause ensures you haven’t legally lost the right to enforce on-time payments in the future.
Please note the above is not a complete list of all the different types of boilerplate clauses that exist and could be found in contracts. The type of agreement you enter into, and the basis upon which it is executed, will play a key role in determining what boilerplate provisions should be included.
The right drafting is crucial
Although the list above provides examples of why it is beneficial to have certain boilerplate clauses in your agreements, it is important to note that these benefits will only become available if the drafting of the boilerplate clauses is clear and watertight.
We frequently find that boilerplate clauses are often ignored during negotiations or poorly drafted. By not getting the drafting right, a poorly drafted boilerplate clause could lead to unintended consequences that jeopardise the entire agreement.
Further advice
Should you require any advice in relation to the use of boilerplate clauses, interpreting and/or drafting them, please get in touch with a member of our Commercial team who will be happy to assist.