Contracts and deeds can be lengthy and quite often people find themselves agreeing to unfavourable terms they didn’t read! Whenever you engage in contractual agreements with someone, it’s important to review fully the rights and obligations conferred by the terms of the contract. This includes any boilerplate clauses, which are usually at the end of contracts and parties typically overlook. But this certainly does not mean they are not important. Below, we look at boilerplate clauses and why you need to read your entire contract thoroughly.

What is a Boilerplate Clause?

Boilerplate clauses or provisions are sometimes referred to as ‘miscellaneous’ but you need to ensure that you pay close attention to them. Although typically overlooked, they are just as important as the more operative parts at the beginning of the contract.

Boilerplate clauses are ‘standard’ clauses used in legal documents covering off common issues or requirements in a contract. Boilerplate language is used to save time. When drafting a contact you, with the assistance of your lawyer, should still ensure that they meet the specific requirements of your contract.

Common boilerplate clauses include:

  • Force majeure – this prevents the parties to a contract being liable if events outside their control stop them from being able to perform their obligations under the contract;
  • Amendment – how are the parties entitled to make changes to the contract;
  • Entire agreement – this is a useful clause as it has the effect of limiting the parties rights and obligations. Neither party can, therefore, claim to have acted in reliance on any prior statement, discussion or schedules. The parties can only rely on the provisions contained in the contract.
  • Law and jurisdiction – this clause specifies the state or country that governs the contract, and the jurisdiction that will hear a dispute if one arises; and
  • Notices – the agreed method of communication between the parties.

Why Do You Need to Pay Attention to Them?

Let’s say, for example, you need to provide another party to the contract notice to exercise an option by a particular time (say 5 pm) on a named date (say 30 June). How do you do that? You start with a fax (how retro of you!) at 4.30 pm but that doesn’t go through. You then send through an email at 4.45 pm. No response. Getting worried, you start calling their phone number and there is still no response. It then hits 5.15pm and you are out of time. You cannot prove that the other side received the notice and therefore it is not accepted.

If the contract states how parties are to provide notice, you need to follow this. Typically, a contract boilerplate notice clause will set out multiple ways to give notice – often a physical address, a fax number and sometimes an email address. You need to ensure that the schedules contained in the contract also contain up to date information. If your contact details change, it is essential that you take steps to have them updated.

Nowadays, digital communication via email is far more commonplace. You should ensure that your boilerplate clause is up to date and reflects the most likely means of communication between the parties. It’s redundant to specify notice by way of fax if you can’t access a fax machine.

Key Takeaways

Boilerplate clauses have a purpose in a contract and you should take care not to overlook them. These boilerplate clauses often come into effect when parties are in a dispute and so it’s essential they are not just ‘cut and paste’ from other generic agreements. If you have any questions or need assistance drafting your agreements, get in touch with our specialist contract lawyers on 1300 544 755.

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