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Dont Blow the Boilerplate in Contracts

Written by: Marijo McCarthy

Article Overview: I have tackled this topic before and, assuming that a generic, global warning about boilerplate in contracts was sufficient, went on to address other topics. Well, you know what they say about "assume"... psst, it has something to do with the first three letters!

Dont Blow the Boilerplate in Contracts

I have tackled this topic before and, assuming that a generic, global warning about boilerplate in contracts was sufficient, went on to address other topics. Well, you know what they say about "assume"... psst, it has something to do with the first three letters!

We all know what "boilerplate" means, right? According to my dictionary, it's "the standardization of a legal document's structure and language." Simple.

And yet if you Google the word "boilerplate," you will discover a world of definitions, some of which will be familiar, while others -- the story of this Victorian era robot named Boilerplate, for example -- may not.

So the first point is that there is no such thing as only one definition for something as varied as the concept of boilerplate... it's all over the map. Likewise, boilerplate contracts themselves are all over the map too, and there is therefore no part, paragraph or provision of which you can afford to overlook.

Second, let's all agree that in this day and age of business done at warp speed, the tendency to rely on or ignore the boilerplate can be a dangerous decision down the line.

For instance, not only do you want to know the beginning and ending dates of the contract you are about to sign, you want to be sure that, if your customer does not perform or pay, you know exactly how to terminate your work and end your obligations under the contract. Oops, did you miss the lack of your right to terminate when you skimmed the boilerplate termination provisions prior to signing? That's always a favorite of mine!

Third, my recommendation is to not just change language, but rather, unless the change is clearly obvious on its face, insert a comment which explains the change from your perspective.

In my experience, it makes for a smoother, more amicable contract negotiation if you explain your concern about a boilerplate provision you are changing instead of sending back a marked-up copy in a vacuum. It also helps the so-called layperson on the other side (who may not be familiar with all of the legal provisions, but who must advocate with their counsel to get a change made) to understand the foundation for your concern as to why a boilerplate provision just doesn't work in a particular transaction.

In summary, boilerplate can be a blessing or a burden, depending upon your perspective. Once you get comfortable with some of the boilerplate provisions which may be perfectly acceptable in most of your contracts, your time is freed up for identifying and negotiating those boilerplate clauses that simply don't work, are unduly onerous or aren't relevant in the contract itself.

As Henry Ford, the entrepreneur who built Ford Motor Company, said: "Don't find fault, find a remedy; anybody can complain."

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Article Tags: boilerplate, contracts, negotiation, right to terminate



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