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. Typically, such clauses will include standard definitions, matters of construction and administration, and other usual provisions.

Boilerplate terms are an important part of commercial agreements. However, parties to negotiation may occasionally give insufficient attention as to whether a particular boilerplate provision is suitable for the situation. For example, 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. Similarly, a limitation on liability enforceable in one agreement may not be valid in another. It is, therefore, always advisable to consider the suitability of boilerplate provisions in particular circumstances.

Boilerplate will normally cover the following matters:

Parties

The contracting parties should be clearly identified.

Recitals

Recitals are intended to explain the background to agreements. They should not include substantive provisions, and are not usually legally binding.

Defined terms

Defined terms are usually inserted at the beginning or (less often) the end of an agreement. They normally have capital initial letters to signify that they have particular meaning. Many terms, such as intellectual property rights, have fairly standard definitions.

Interpretation

Boilerplate terms generally includes provision that:

• singular and plural, and the genders, are interchangeable

• generic words are not narrowly construed by examples following them

• definitions from specified legislation 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. Typically, these include clauses covering:

• force majeure (excusing failure of performance for reasons outside a party's control)

• confidentiality

• variation (must normally be made in writing, following a specified procedure)

• parties' relationship (the parties are not partners, principal and agent, employer and employee, etc.)

• waiver (indulgence granted to a party does not mean the other has waived a right)

• non-assignment (the parties may not assign obligations without the other's consent)

• severance (an invalid part of the agreement will not affect the enforceability of the remainder)

• succession (the agreement endures for the benefit of the parties' successors and assigns)

• notices (for each party, specifying to whom, where and how these are to be sent)

• survival (which clauses are expressed to survive termination)

• further assurance (the parties will take any further steps needed to complete and give effect to the agreement)

• entire agreement (the document alone encapsulates the parties' agreement and no other oral or written statements or terms apply)

• dispute resolution (by alternative dispute resolution, by expert determination, by arbitration or by the courts of a chosen country), and

• governing law (which country's law applies to the agreement).

All are important, the last two particularly so, especially where one of the parties is based, or the contract has a connection, outside England and Wales.

More detailed commentary on individual boilerplate clauses may be found in the Boilerplate - clause bank precedent.

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 separate document forming part of the agreement. Often this is called a schedule, appendix or annex.

Signature and execution clauses

These are usually placed at the end of the agreement, before or after the schedules. 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.