What are boilerplate clauses?
Boilerplate clauses are the standard, often non-negotiable, sections found in almost every commercial contract. They don’t deal with the main commercial terms (like the price, the product, or the service being offered) but instead handle the legal mechanics and operation of the contract itself.
The term ‘boilerplate’ comes from the world of printing, where standard text was kept in fixed metal plates, ready to be stamped onto many documents. In contracts, the meaning is similar: they’re the essential, recurring legal language that holds the whole deal together. Even though they’re repetitive, they play a critical role in establishing legal certainty, managing risks, and clarifying the relationship between the parties.
Why should I pay attention to boilerplate clauses?
People often overlook boilerplate clauses because they appear generic, but that’s a mistake you shouldn’t make. These provisions are crucial because they dictate how your contract will be interpreted and enforced if a disagreement arises. Ignoring them can lead to costly and time-consuming disputes.
For instance, a well-drafted set of clauses can protect you from accidentally waiving your rights, ensure that only the written agreement counts, or even determine which country’s courts you’ll need to attend if a lawsuit starts. They are fundamental to risk management, clarity, and ensuring the contract reflects your intentions, even when circumstances change. Remember, many contract disputes that end up in court aren't about the price or the product, but about how these often-forgotten mechanical clauses should be interpreted.
Which boilerplate clauses are common?
Commercial contracts usually feature several types of boilerplate clauses, all designed to make the agreement legally sound and manageable. While the specific selection depends on the contract’s nature, a few appear almost universally. It’s essential to tailor these clauses to meet the unique requirements of your business and the specific deal you're entering into. You shouldn't rely solely on copied text.
Entire agreement clause
An entire agreement clause (also known as the merger or integration clause) states that the written contract represents the entire understanding between the parties. This means that no previous discussions, negotiations, emails, or even verbal promises count as part of the legally binding agreement unless they’re written into the final document.
The purpose of this clause is to create certainty. Without it, someone might claim you agreed to something important during a phone call or an earlier meeting, which can complicate enforcement. By including this clause, you make sure that only what’s on paper holds legal weight.
No-waiver clauses
A no-waiver clause (or waiver clause) protects a party who temporarily overlooks a breach of contract by the other side. It essentially states that if you don't immediately enforce a right or remedy, it doesn't mean you’ve lost that right forever or that you've waived the ability to enforce it later.
For example, if a customer misses a payment deadline but you allow it to slide, the no-waiver clause confirms that you can still hold them accountable for future missed payments. Without it, a court might argue that you’ve set a precedent and implicitly agreed to relax the terms of the contract.
Force majeure clauses
A force majeure clause allows parties to avoid or suspend their contractual obligations if an extraordinary event prevents them from performing. This event must be beyond their control and wasn't reasonably foreseeable when they signed the contract. Common examples, depending on how the clause is worded, include:
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natural disasters
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war
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terrorism
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global pandemics
The specifics of the clause are extremely important because the legal definition of 'force majeure' is narrow. Your contract must clearly list the events that trigger the clause and detail what happens next, such as suspending the contract or ending it entirely. For more information, read Force majeure.
Governing law and jurisdiction clauses
This clause clarifies which country's law applies to the contract and which court system will resolve any disputes. If you’re contracting with someone based in a different jurisdiction (eg a client based in Scotland while you're in England), this clause is vital. You need to decide which country’s laws will be used to govern the interpretation of the terms of your contract.
Similarly, the jurisdiction part specifies where (eg courts of England and Wales) any lawsuit must be brought. Choosing a clear, respected jurisdiction saves considerable time and cost if you end up in a legal battle, and it ensures both parties know the rules they're playing by.
For more information, read Jurisdiction and international contracts.
Notices clauses
A notices clause sets out the formal, agreed-upon method for sending and receiving official communications related to the contract. This includes things like termination warnings, claims of breach, or formal demands. It typically specifies the required:
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format (often in writing)
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methods of delivery (eg recorded delivery post, or a specific email address)
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when a notice is deemed to have been received (eg 48 hours after posting)
Following these requirements exactly is crucial, especially when serving a notice to terminate the contract, as failure to comply could render the entire communication invalid and potentially leave you bound to the agreement.
Third-party rights clauses
A third-party rights clause deals with who, outside of the immediate parties who signed the agreement, can enforce its terms. The law governing this differs depending on the contract's jurisdiction:
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in England and Wales, the Contracts (Rights of Third Parties) Act 1999 is the relevant law
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in Scotland, the Contract (Third Party Rights) (Scotland) Act 2017 is the relevant law
In both jurisdictions, most commercial contracts include a clause to expressly exclude the operation of the relevant Act, ensuring that only the original parties can enforce the terms.
Variation clauses
A variation clause (sometimes called a no oral modification clause) sets out the only valid way the parties can legally change the contract after signing it. The standard wording requires that any changes must be made in writing and signed by or on behalf of all parties involved.
The whole purpose is to prevent informal, casual, or accidental changes from being made verbally (over the phone or during a meeting), which can cause serious confusion or disputes later on. By having this clause, you ensure that every contract amendment is formally documented and agreed.
For more information, read Varying a contract.
What steps can I take to ensure that these clauses are properly included in my contract?
You can make sure you tailor the relevant clause and its scope to fit the context of the deal. Remember, you shouldn't just include every single clause in every contract. Always consider the different positions without and with the relevant clause, and how its inclusion or exclusion benefits you in the transaction.
If you're ready to formalise a business relationship, make relevant commercial contracts for your situation, or get a bespoke document drafted. Do not hesitate to Ask a lawyer if you have any questions about tailoring these clauses to your specific situation.
