Boilerplate Clauses – Are They Important?

When you glance at the back end of a contract, it’s easy to dismiss the so-called “boilerplate” clauses as legal filler. They look standard. They sound familiar. They rarely get much attention in negotiations.

The fact is, well drafted boilerplate clauses can make the difference between your business being legally protected or exposed. They are not just legal wallpaper; they quietly govern how your contract works when things go wrong.

Many businesses assume these clauses are interchangeable or can be carried across from contract to contract. This is not the case. A single word can change who bears the risk, how disputes are resolved, or whether you can even enforce your rights. Below are a few of the clauses that often catch businesses off guard.

Entire agreement clauses

This clause confirms that the written contract is the full agreement between the parties. Sounds simple? But if this clause is missing or badly drafted, side communications for example emails, verbal promises, specifications and even meeting notes can become binding.

This could open the door to claims against your business, for example in negligent misstatement if inaccurate information was relied upon or misrepresentation if pre-contract discussions contradict the written terms.

Without a strong entire agreement clause, your contract might not be the final word, and that is a legally precarious place to be.

Third party rights clauses

This clause is drafted to clarify who has rights to enforce the terms of the contract. It is usually the parties’ intentions that only the parties to the contract should have such a benefit (and at times, associated companies depending on what is desired). Without correct drafting, a person who isn’t even a party to the contract could enforce its terms.

Imagine a supplier’s subcontractor suing you because your contract accidentally gave them rights. If you don’t want outsiders enforcing your contract, you need clarity here.

Notice clauses

Notice clauses set out strict requirements when sending communications under the terms of the contract, for example, to terminate a contract. The consequences of failing to follow such requirements could easily be more detrimental than you anticipate with the termination being ineffective. The result? You could be stuck in an annual rolling contract for a further year, paying for services you no longer want.

Dispute resolution, jurisdiction and governing law clauses

The above clauses govern how disputes will be approached, where disputes are heard and which law applies. A well drafted dispute resolution clause can do more than set the rules for conflict; it can help maintain a future ongoing relationship and reduce costs by avoiding litigation. If you don’t check your clauses, you might find yourself fighting a legal battle in a foreign court under unfamiliar law, at significant cost.

A well drafted Force Majeure clause determines how unexpected events are managed, whether or not the impact is on one or both of the parties, for example, pandemics, war, earthquakes or even supply chain disruption and tech outages. If such a clause is missing or vague, the impacted party could be left carrying the risk for events outside of their control.

The illusion of safety

In short, just because boilerplate clauses look familiar, don’t assume they are appropriate or protective. What appears to be “standard” wording can often favour one party, and it might not be you. Also, if you’re relying on templates or copying from previous contracts, you could be importing risks that don’t fit your business or are legally outdated.

When disputes are being considered in court, the fine print of the boilerplate clauses is not overlooked. And if those clauses do not reflect what you had intended, you may find yourself on the wrong side of the dispute.