What Is A Boilerplate Clause In Commercial Contracts?

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Emilene LucasLegal Assessment Team Supervisor
Updated on 16th May 2024

If you deal with commercial contracts regularly, you’ll likely be familiar with boilerplate clauses.

These are standard parts of a contract found at the beginning or end and are sometimes (cynically) referred to as ‘the small print.’ While the very existence of these clauses hints at their importance, they’re often overlooked. 

But (surprise, surprise), they’re important because they cover how agreements are understood, whether they’re valid, and how they’re enforced. In the event of a contract dispute, these clauses are scrutinised by the court to figure out how the contract should be followed. 

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In this article, we’ll explore what boilerplate clauses are, why they are important, and how they can impact your business transactions. We’ll also address some common questions and provide insights into drafting effective boilerplate clauses.

What is a boilerplate clause?

A boilerplate clause is a standard part of a contract covering general terms and conditions.

These clauses are often used across contracts and aren’t changed much from one to another. Their purpose is to make sure that key legal points are clear and consistent in all contracts. 

Why are boilerplate clauses important? 

Boilerplate clauses provide consistency in contracts, making them easier to manage. They cover standard legal terms and conditions commonly used across different contracts, keeping them legal and enforceable, even if something unexpected happens. 

With boilerplate clauses, contracts are more robust, easier to interpret, and less likely to result in misunderstandings or disputes. What’s more, they can also be easily changed across the board if necessary. 

What are the most common boilerplat clauses?

Common types of boilerplate clauses include: 

  • Entire Agreement Clauses that state the contract contains all the terms agreed upon by the parties and supersede any previous agreements or understandings. 

  • Severability Clauses that ensure if one party of the contract is found to be invalid or unenforceable, the rest remains effective. 

  • Force Majeure Clauses that excuse parties from fulfilling their contractual obligations in the event of unforeseen circumstances beyond their control, such as natural disasters. 

  • Notices Clauses that specify how and where formal notices or communications should be sent. 

  • Assignment Clauses that say whether and how parties can transfer their rights and obligations under the contract to another party. 

  • Confidentiality Clauses to keep sensitive information from being disclosed.

  • Waiver Clauses that ensure one party does not lose its rights to enforce terms at a later date. 

  • Variation Clauses that state when and how a contract can be changed in the future. 

  • Third Party Rights that limit the ability of a non-party to enforce the contract terms or stop a third party from receiving benefits under the contract. 

These are just a few examples of boilerplate clauses, but many others may be included depending on the specific needs and circumstances of the parties involved.

A commercial solicitor can support drafting boilerplate clauses to provide consistency for businesses entering into legally binding agreements

Can boilerplate clauses be negotiated?

Boilerplate clauses are mostly considered standard and non-negotiable because they reflect legal principles that are well-established and widely accepted. 

However there may be situations where parties have specific concerns or requirements that warrant negotiation, but it depends on the context and bargaining power of the parties involved. 

How should boilerplate clauses be drafted? 

Above all, boilerplate clauses should use simple language and avoid unnecessary complexity to ensure they are easy to understand.

They should also be drafted with flexibility to accommodate unforeseen circumstances and comply with the law and any industry standards or best practices. 

A commercial lawyer is best placed to draft, review, or advise on boilerplate clauses to make sure they provide the right level of protection and align with the purpose of the contract. 

Should you use templates for boilerplate clauses? 

It is easy enough to find boilerplate clause templates online that can be quickly deployed across your contracts. But you should be wary of doing this despite the time-saving benefits.

A boilerplate clause aims to provide clarity and define rights and obligations. They often include important legal protections for parties, such as limitation of liability or indemnification provisions. Therefore, using templates without proper customisation can result in inconsistencies or contradictions in the contract which undermine its enforceability, and create opportunities for legal challenges. 

How can a solicitor help with boilerplate clauses? 

Solicitors can draft boilerplate clauses tailored to your specific needs and objectives, making sure they accurately reflect your intentions, and provide the necessary legal protections. 

Commercial lawyers can also review existing boilerplate clauses to identify potential risks or assist during contract negotiations. 

Finally…why do they call it boilerplate? 

The word boilerplate originated from the printing industry in the late 19th century when manufacturers used standardised pieces of metal in printing presses to produce identical copies of the same text over and over again. 

The term boilerplate is used to describe these kinds of standardised clauses because they, like the metal plates in printing, can be replicated time and time again across different contracts. 

How can Lawhive help?

At Lawhive, our network of commercial lawyers is on hand to provide fast, affordable contract drafting, including boilerplate clause drafting.

Contact us to find out more and get a fixed-fee quote for the services of a specialist lawyer.

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