LexisPSL

A Legal Practical Support Tool.

Sign up for a free trial today and get full access to LexisPSL and LexisLibrary for a week.

View KnowHow What is KnowHow?
View Precedents What is Precedents?

Boilerplate - overview General

Boilerplate is normally understood to mean those clauses in an agreement relating to its interpretation and general operation, rather than its particular subject matter. Typically, such clauses will include standard definitions, matters of construction and administration, and provisions that have the effect of excluding matters that might otherwise be implied by law.

Boilerplate terms are an important part of commercial agreements. Parties should always assess the suitability and enforceability of particular boilerplate provisions in the context of the contract they are negotiating.

Examples:

  • a dispute resolution clause in an agreement covering a technical relationship may provide for resolution by the courts, where expert arbitration or an informal resolution process might have been more appropriate

  • a limitation on liability clause agreed between two parties with broadly equal bargaining power in a contract that has been individually negotiated may not be valid in another contract between a market leader using its standard terms

  • Parties should always consider the suitability of boilerplate provisions in particular circumstances. It will be noted that there are different precedent clauses that should be used in different circumstances and/or for different types of contracts. Additional clauses may also be needed.

    Boilerplate will normally cover the following matters:

    Parties

    The contracting parties should be clearly identified. Any generally accepted identifiers such as a company number or, in the case of a US corporation, its state of incorporation, should be included.

    Recitals

    Recitals are intended to explain the background to agreements. For that reason they should not include substantive provisions and are not usually legally binding. Recitals may be used by the courts to interpret the intentions of the parties where this is not clear from the body of the agreement itself.

    Defined terms

    Defined terms are usually inserted at the beginning or in a schedule at the end of an agreement. The first letter of each word is normally capitalised to signify that it has particular meaning. Many terms, such as intellectual property, have fairly standard definitions.

    Interpretation

    There is typically a section on interpretation that sits just after the provisions relating to defined terms. The following statements are usually included:

  • singular and plural, and the genders, are interchangeable

  • generic words are not narrowly construed by examples following them (which saves the draftsman having to add wording such as 'but not limited to' after use of the word 'include')

  • definitions from specified legislation (including new or re-enacted legislation covering the same subject matter) or other sources apply

  • clause headings do not affect interpretation, and

  • specific periods (eg days) have particular meanings

  • Miscellaneous provisions

    Provisions relating to the general operation, rather than interpretation, of an agreement are normally placed at the end of an agreement. Typically, these include clauses covering:

  • assignment

  • confidentiality

  • costs

  • counterparts

  • dispute resolution

  • entire agreement

  • force majeure

  • further assurance

  • governing law

  • interpretation

  • language

  • non-solicitation

  • notices

  • relationship of the parties

  • rights of third parties

  • set-off

  • severance

  • succession

  • time of the essence

  • variation

  • waiver

  • Additional clauses that may be needed for specific circumstances or types of agreements are also included in the boilerplate clause bank.

    More detailed commentary on individual boilerplate clauses may be found in the relevant Practice Note.

    Documents incorporated into the agreement

    Certain provisions of an agreement, often those that are detailed or particularly specific to the transaction, may be incorporated in a section or separate document forming part of the agreement.

    Signature and execution clauses

    These are usually placed at the end of the agreement, normally after the schedules and before any annexes. The parties will sign the agreement, either themselves or by an appointed representative.

    Agreements may be signed either under hand or as a deed. The testimonium appears before the signature blocks, and is evidence of due execution of the agreement.

    KnowHow: Detailed Practice Notes written by our Professional Support Lawyers, guiding you through the key issues in each topic.

    Precedents: Precedents with drafting notes written by our Professional Support Lawyers, plus selected key precedents from authoritative Butterworths® titles.

    To find out more about PSL Contact us or call 0207 400 2984