What are "boilerplate" clauses?

We have a tendency to pay lip service to clauses in contracts that appear standard for which we routinely see, particularly those who regularly review, and negotiate or even draft contracts.

The term boilerplate clause is used to describe a clause which is a clause that appears in the same form across every agreement, draft centrally and reproduce without amendment and I include, notices governing law, jurisdiction, severance, entire agreement, waiver, assignment, force majeure and counterparts among others.

The term boilerplate comes from the 19th century printing practice and it was a rolled steel plate used to construct steam boilers. Heavy standardised mass-produced sheets.

Like most clauses in a contract of any substance, boilerplate clauses must still be respected and reviewed with caution.

To provide 2 examples, the first an “entire agreement clause” could look something like this:

“This agreement, together with the documents referred to in it, constitutes the entire agreement between the parties and supercedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter”.

As the wording implies, everything within the agreement constitutes the entirety of the agreement which means if a representation has been made by one party to the other and that representation has not been included within the agreement as a term of the contract, it will be of no application.

For this reason, it is important to check that any agreement reflects the full understanding of what is to be included within the contract between the parties.

If for example a supplier emails a manufacturer and confirms that a particular product will be in the colour red but the agreement does not but the agreement does allow the supplier to use any colour at their discretion, the customer will not be able to rely upon that e-mail to demonstrate that the supplier has breached the agreement by supplying a product in the wrong colour, although other remedies may be available such as misrepresentation.

An example of a waiver clause could be:

“No failure or delay by any party to exercise any right or remedy provided under this agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy”.

In other words, if Party A breaches an agreement, for example, entitling Party B to a right or remedy in respect of that agreement, after a passage of time without any action being taken, Party A may assume that the time for which Party B could take action has passed but that is not the case and the clause expressly provides that any failure or delay to exercise the right or remedy will not constitute a waiver of that right or remedy. This can create uncertainty particularly in contracts where there is an increased risk of things going wrong.

The key takeaway here is not to be complacent with boilerplate clauses and to ensure that you fully understand what they mean and the likely impact if something goes wrong.

Here at Sewell Law, as a niche litigation practice, we have a wealth of experience in all manner of contract disputes. If you require any assistance please get in touch.