Boilerplate legal documents refer to the terms and clauses listed at the end of legal documents (most often, corporate legal documents). 3 min read
Boilerplate legal documents refer to the terms and clauses listed at the end of legal documents (most often, corporate legal documents). Boilerplate clauses are also known as general clauses, standard clauses, or miscellaneous clauses.
These legal provisions cover a range of potential issues, such as how disputes will be resolved, the process to follow if a contract is claimed to be unenforceable, which laws apply to the agreement, and more. In addition to providing instructions on how to act in various situations, boilerplate clauses define the relationship between the parties.
Boilerplate clauses are often overlooked thanks to their use of standardized language and their location at the very end of the agreement. However, these provisions are just as important as the rest of the terms. Read boilerplate clauses carefully and thoroughly.
Common Boilerplate Terms and Clauses
Below are some contractual provisions commonly used within the boilerplate section of a legal agreement:
- Severability - If part of your agreement is illegal or invalid, a severability clause (also known as a savings clause) will maintain that the rest of your contract is still valid. Without such a clause, the entire contract could be thrown away if just one part of it is considered unenforceable or invalid.
- Jurisdiction or governing law - This clause states which jurisdiction or governing law applies to the agreement, and where a lawsuit will be filed if disputes come up.
- Dispute resolution - Any contract involving at least two parties will have a dispute resolution clause to state how potential disputes will be resolved. The clause might even designate the preferred method of dispute resolution, such as mediation, negotiation, or arbitration, the latter of which has gained much popularity thanks to its fast and informal way of resolution.
- Force majeure - This type of clause states that if the contracts are unable to complete their contractual duties owing to circumstances out of their control, their responsibilities may be either temporarily suspended or completely excused. A force majeure clause may include specific examples, such as floods, strikes, war, and other disasters that would make fulfilling contractual duties impossible.
- Waiver - Waivers are often overlooked, but they contain an important element of the agreement. A waiver clause states that if a party does not enforce part of the contract, such as charging a returned check fee, they may still do so sometime in the future.
- Amendment - An amendment clause describes how the contract may be modified or changed. In general, such clauses require that any changes must be written and signed by all parties.
- “Time is of the essence” - When these words are included within a contract, it means that the contract's timelines are considered essential to the agreement. If a party does not satisfy the contractual timeline and any required deadlines, the other party may rescind the contract.
- Assignment - This type of clause states whether a party can transfer their contractual obligations or rights to another party. An assignment clause may include exceptions, such as if the assignment may only be performed with the other party's permission.
- Headings - This type of clause simply expresses that bold headings used within the document are only for organizational purposes. Often, headings are an oversimplified summary of the context and should not be used to discern the actual clause terms.
- Counterparts - This clause will be included in a contract if two or more parties intend to sign separate copies of the same legal document. Typically, this occurs when parties are unable to meet in the same place at the same time. A counterparts clause is often stated as “This agreement (or contract) may be executed in counterparts.”
- Notice - A notice clause explains how each party will provide notice to the other. It may include the form of notice (e.g. written), the method of delivery, and when it is considered received.
- Entire agreement - This type of clause may be very important when negotiations are ongoing. It states that any prior understandings of the agreement, including other oral and written agreements, are not included within the current contract. If a contract includes an entire agreement clause, each party must ensure that anything and everything they wish to be included in the deal is detailed within the current contract itself.
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