Why You Shouldn’t Ignore the Boilerplate in Your Contract

The term “boilerplate” is one of those terms in the English language that everyone seems to use without pondering what it actually means.  Say “boilerplate” and most people think of the tiny print of dense legalese that no one reads.

Without going into the history of the word, boilerplate (in the context of business contracts) has to do with language and clauses that have become standardized and are not unique to any particular contract or agreement.

Because boilerplate provisions are “standardized,” some people who are parties to business contracts believe these provisions do not need any attention and are fine as is. You should not operate under this assumption, though. The truth is that boilerplate provisions can be vital for both parties to a business contract. This blog will cover some notable boilerplate provisions you may encounter.

Choice of law and jurisdiction.

Let’s say you and your clients live and operate in different states. If you get sued, where will the court actions take place? For efficiency’s sake, you’ll probably want to have the jurisdiction to be your home state.

If you don’t specifically designate your home state as the place for litigation, there’s a chance you could be playing as the away team if you ever get sued.

You can also go further and identify the county in which lawsuits must be filed.

Notices.

If you’re lucky, you can simply call up the other party in the contract and chat if you have a simple question or just want to check in.

Some matters are too important to leave to quick phone calls.  For instance, how do you want to be informed that the other party wants to end the agreement? You should have a paper trail for that.

The notices provision outlines the conditions you or the other party need to meet in order to issue a legally binding notice. If you don’t pay attention to the notices provision, miscommunication could wreak havoc on your company and reputation.

Dispute resolution.

If a dispute arises, how will you and the other party resolve things?

You might want to try mediation (a process in which a neutral third party oversees and facilitates negotiations) before resorting to litigation. Or, you might want to utilize arbitration, which falls somewhere between mediation and litigation.

There are many ways to structure the dispute resolution provision in your contract so you and the other party can save money and preserve the business relationship.

Indemnification.

This provision designates which party is responsible for paying damages or fees if the contract is breached.

For example, let’s say you hire an independent contractor to develop a logo for your company’s upcoming event. Weeks after the event, a complete stranger emails you and lets you know that the logo infringed upon his work. If you have a properly-written indemnification provision, you shouldn’t be on the hook for any damages that result from the contractor’s actions. This means you have shifted liability from yourself to the contractor you hired.

Conclusion.

Don’t fall victim to boilerplate provisions in your contracts. Every sentence in the document should be looked over by an attorney to ensure you are in a good position.

Attorney Christine Kuntz is an unabashed contract nerd and has a particular passion for using the often-unnoticed boilerplate clauses to protect her clients.

Concerto Law will be glad to help draft your company’s contracts and ensure you are set for success. Reach out to our team today to set up a consultation.