A boilerplate clause, also known as a Miscellaneous clause, is a clause you usually find at the end of a contract. They are standardised clauses that outline the general issues relating to the contract such as legality and enforceability. It is important to read the boilerplate clause because they contain instructions on how you manage the contract, including amendments, communications, and dispute resolution. The boilerplate clause helps you fulfill or enforce your contractual obligations by outlining the requirements you have to meet.
What does a boilerplate clause include?
Some common examples of matters boilerplate clauses cover:
- How to amend the contract and waive rights
- How each party is to give notices to each other
- Limitation on Damages and Liability
- Confidentiality – what can or can’t a party disclose
- Severability – for example, what to do if the contract is invalid
- Dispute resolution – how to deal with disputes, usually before going to court
- Jurisdiction – which State or Country can a party bring Court proceedings in
- Indemnity – that a party will cover the costs of disputes brought by third parties
- Warranties – promises made between parties about certain obligations under the contract
- Interpretation- for example, whether or not headings can be used in interpreting the contract
- Assignment- whether one party can sell or transfer their rights under the contract to a third party
- Force Majeure- what to do when a party is unable to fulfill their obligations under the contract for unforeseeable reasons
- Joint and severed liability – that is whether both parties are both responsible for something or if it’s just an individual party
- Relationship- what type of relationship exists between the parties. This is so that neither can enter into other contracts for or with the other
- The entire agreement – meaning the rights and obligations of parties is limited to what is in the contract. Anything a party refers to outside of it is invalid.
This is not an exhaustive list. You cancustomise a boilerplate clause based on the nature of your contract and what rights and obligations parties have. You can build your own customisable contract here.
Why are they important?
It is easy to gloss over the boilerplate clauses in a contract because they do not relate to the actual, substantial content in the contract. However, these clauses can be really important when you want to know how to take action in amending or enforcing the actual contract. A Court does recognise these clauses and it will enforce them where it is appropriate to do so. For example, if you wanted to bring proceedings against a party for breach of contract, a court would most likely enforce any dispute resolution clauses in the agreement first.
Having a boilerplate clause saves time and money for both parties. It specifies the management and administration of the contract, meaning resources are not wasted in double-checking your actions. For example, it would be impractical to email, courier and fax a document to ensure the other party received it and then have an employee call or visit the other party to confirm receipt. A boilerplate clause would specify certain methods of service and when the sending party can assume the documents have been received.
Conclusion
Having a boilerplate clause in your agreement will save you resources when fulfilling your contract and dealing with any issues. Removing a boilerplate clause will require you to go to court for small disputes which becomes costly and inefficient. However, it is essential you know what you can and can’t do because a Court will not assist you in amending the boilerplate clause if you change your mind later. Therefore, it is important to read and understand the boilerplate clause in your contract and raise any concerns early on. A contract lawyer can help you in the matter and also negotiate any changes.
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