Final Contract Project

Common Boilerplate Provisions for Contracts

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A look at some of the standardized language you'll find in many contracts.

The term "boilerplate" refers to standardized language in contracts. Although often grouped together, boilerplate provisions don't have much in common with one another except that they don't fit anywhere else in the agreement. For that reason, they are usually dumped at the end of the agreement under a title such as "Miscellaneous," "General," or "Standard."

Even though boilerplate is buried in the back of the agreement, these provisions are important. They affect how disputes are resolved and how a court enforces the contract. The effect of boilerplate is most often noticed when it is omitted from a contract -- for example, if a contract doesn't include a provision awarding attorneys' fees to the winner of a dispute and there's a breach (violation) of the contract, it may prove tough for either party to find a lawyer willing to take the case. 

Let's look at some common boilerplate provisions and what they mean.

• Costs and attorneys' fees. In the event of a legal dispute, the party that loses must pay the winning party's legal fees. (For more information, see Nolo's article Attorneys' Fees Provisions in Contracts.)
  sample:  In the event a lawsuit, arbitration or mediation is initiated by either party, the party against whom a judgment or award is entered shall also be liable for costs of suit and reasonable attorneys' fees as set by the court or arbitrator.
• Arbitration. Any disputes about the contract must be resolved through arbitration proceedings, not in a lawsuit. (For more information, see Nolo's article Arbitration Provisions in Contracts.)
  sample: All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the state of [insert state in which parties agree to arbitrate] or another location mutually agreeable to the parties. The arbitration shall be conducted on a confidential basis pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact and shall include the assessment of costs, expenses, and reasonable attorneys' fees. Any such arbitration shall be conducted by an arbitrator experienced in [insert industry or legal experience required for arbitrator] and shall include a written record of the arbitration hearing. The parties reserve the right to object to any individual who shall be employed by or affiliated with a competing organization or entity. An award of arbitration may be confirmed in a court of competent jurisdiction. 
  sample: Any claim or controversy that arises out of or relates to this Agreement or the alleged breach of it, and which cannot be settled by the parties will be settled by submission to a local chapter of the American Arbitration Association or a similar body for binding unappealable arbitration in accordance with the current rules and procedures of such organization. The aggrieved party has the right to bring the grievance to arbitration in the state in which such party has its respective principal place of business. In the event a lawsuit or arbitration proceeding is initiated by either party, the party against whom a judgment or award is entered will also be liable for costs of suit and reasonable attorneys' fees as set by the court or arbitrator. 
• Choice of law. In the event of a dispute, a choice of law provision determines which state's legal rules will be applied in the lawsuit.
  sample:  Governing Law.  This Agreement shall be deemed to have been executed and delivered within the State of [State], and the rights and obligations of the parties shall be construed and enforced in accordance with, and governed by, the laws of the State of [State].
• Jurisdiction. In the event of a dispute, a jurisdiction clause determines where (in which state and county) the lawsuit must be filed.
  sample: The courts of .......... will have exclusive jurisdiction to adjudicate any dispute arising under or in connection with this Agreement.
• Venue - Many people may not understand the difference between Jurisdiction and Venue. Jurisdiction refers to the authority a court has to hear the matter. Jurisdiction involves both the rights the specific court has to rule on the dispute (what type of claim it is) and the ability of the court to enforce a judgment against the defendant. For example, a typical jurisdiction clause may say “Any action to enforce this agreement shall be filed in the Superior Court of California.”
  Venue clauses relate to the proper geographical location of the court of jurisdiction. A typical venue clause may read “Any litigation arising out of this Agreement shall be filed in the appropriate Court of jurisdiction in Orange County, California.” However, the choice of venue must be appropriate under the law. In a contract action, venue is appropriate where the contract was entered into, where one of the defendants resides, or where the contract is to be performed. 
• Waiver. This permits the parties to forego or give up the right to sue for breach of a particular provision of the agreement without giving up any future claims regarding the same provision.
  sample: No breach of any provision of this Agreement will be waived except with the express written consent of the party not in breach. 
• 3rd Party Rights - In some jurisdictions, the law allows that third parties may acquire rights under a contract. This may be the case even in common law jurisdictions (such as the UK) that adhere to the doctrine of privity of contract. A third party rights clause may be used to prevent or try to prevent third parties gaining rights under a contract. 
  sample: This Agreement is made for the benefit of the parties, and is not intended to benefit any third party or be enforceable by any third party. The rights of the parties to terminate, rescind, or agree any amendment, waiver, variation or settlement under or relating to this Agreement are not subject to the consent of any third party. 
• Severability. This permits a court to sever (take out) an invalid provision and still keep the rest of the agreement intact.
  sample: This Agreement constitutes the product of negotiations of the parties hereto and any enforcement hereof will be interpreted in a neutral manner and not more strongly for against any party based upon the source of the draftsmanship of this Agreement. If any provision of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions hereof shall continue to be fully effective. 
• Variations - Contracts very often stipulate the procedures by which they may be altered. Those procedures can be very simple or very elaborate. An example of a simple variations clause, specifying that variations must be in writing, is as follows:
  sample: This Agreement may not be varied except by a written document signed by or on behalf of each of the parties. 
• Integration. An integration clause says that the written contract represents the final agreement of the parties. Often, it explicitly states the any prior agreement or discussions of the agreement are replaced by the written contract and that any further modification to the contract must be in writing.
  sample: This Agreement contains the entire agreement between the parties, and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. The provisions of this Agreement may be waived, altered, amended or repealed, in whole or in part, only upon the written consent of all parties. 
• Attachments. This guarantees that attachments and exhibits will be included as part of the agreement.
  sample: All attachments referred to herein are attached hereto and by this reference incorporated herein. Attachments include: Attachment A - Services Attachment B - Payment Attachment C - Additional Provisions Attachment D - General Provisions Attachment E – Insurance Provisions 
• Notice. This describes how each party must provide notices to the other (for example, to terminate the agreement).
  sample: Any notice given under this Agreement must be in writing and shall be deemed to have been duly given if mailed by U.S. first-class certified mail, return receipt requested, postage prepaid and addressed to the attention of the undersigned at the address shown in the heading of this Agreement.  
• Relationships. This prevents either party from claiming a business relationship with the other (for example, by stating that the parties are partners or that one is the other's employee). Your relationship with the receiving party is usually defined by the agreement that you are signing-for example an employment, licensing or investment agreement. To an outsider, it may appear that you have a different relationship, such as a partnership or joint venture. It's possible that an unscrupulous business will try to capitalize on this appearance and make a third-party deal. That is, the receiving party may claim to be your partner to obtain a benefit from a distributor or sublicensee. To avoid liability for such a situation, most agreements include a provision like this one, disclaiming any relationship other than that defined in the agreement. We recommend that you include such a provision and take care to tailor it to the agreement. For example, if you are using it in an employment agreement, you would delete the reference to employees. If you are using it in a partnership agreement, take out the reference to partners, and so forth.
  sample: Nothing contained in this Agreement shall be deemed to constitute either party a partner, joint venturer or employee of the other party for any purpose.
• Assignment. This affects the ability of the parties to sell or transfer their rights under the agreement to another party. 
  sample: [Party name] may not assign this Agreement to any other person without the express prior written consent of the other party or its successor in interest, as applicable, except as expressly provided otherwise in this Agreement. A putative assignment made without such required consent will have no effect. 
• Force majeure (pronounced fors- mazhoor'; also referred to as "Acts of God"). This clause establishes that the agreement will be suspended in the event of unforeseen disasters (such as earthquakes, hurricanes, floods, and so on).
  sample: "Force Majeure Event" means an event, or a series of related events, that is outside the reasonable control of the party affected (including power failures, industrial disputes affecting any third party, changes to the law, disasters, explosions, fires, floods, riots, terrorist attacks and wars). Where a Force Majeure Event gives rise to a failure or delay in either party performing its obligations under this Agreement (other than obligations to make payment), those obligations will be suspended for the duration of the Force Majeure Event.
• No Admissions.  The parties agree that this Agreement is being made solely for the purpose of avoiding the expense and inconvenience of continuing disputes and that it is not to be construed as an admission on the part of any party of any unlawful, unethical or wrongful conduct or of any liability or damages on the part of any of the parties hereto. 
• Headings. This clause provides that the headings used throughout the agreement have no special significance.
  sample: The section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.
• Escrow. This provision allows you to place trade secrets, payments, or other information into a special account which will be opened only under certain conditions.
• Limitations on damages. This sets a cap or otherwise limits the types of damages that may be awarded in a contract dispute.
• Warranties. These are promises or assurances made by each party regarding various contract obligations. see standard warranty clauses 
  Disclaimer of Warranty; Due Diligence. The Goods are being sold “as is,” and the Seller disclaims all warranties of quality, whether express or implied, including the warranties of merchantability and fitness for particular purpose. The Buyer acknowledges that it has not been induced by any statements or representations of any person with respect to the quality or condition of the Goods and that no such statements or representations have been made. The Buyer acknowledges that it has relied solely on the investigations, examinations, and inspections as the Buyer has chosen to make and that the Seller has afforded the Buyer the opportunity for full and complete investigations, examinations, and inspections. 
• Indemnity. In an indemnity provision, one party guarantees that it will cover the costs of certain disputes brought by third parties (that is, people who are not parties to the agreement).
  sample: Indemnification Against Claims Arising From Goods - Seller agrees to protect, defend, indemnify and hold University harmless from all claims, losses, damages, and expenses, which may be asserted against or be incurred by University whether direct or indirect, foreseeable or unforeseeable, including, but not limited to, those resulting from injuries to any person or damage to any property, caused in any manner by any act or failure to act of Seller in connection with the furnishing of goods covered by this Purchase Order, or because of any imperfection or defect in said goods, or based upon any claim of product liability or strict liability in tort, or because of the failure or such goods to be in accordance with the description of such goods as may appear in any catalog, analytical information report or other technical bulletin as is furnished or utilized by University, or because of the failure of such goods to be produced in compliance with the requirements of this Purchase Order.  more information on indemnification  
• Confidentiality. This guarantees that the parties will not disclose certain information.
  sample: Confidentiality- Definition of Confidential Information. The term "Confidential Information" includes all [material] [non-public] [business-related] information, written or oral, disclosed or made available to the Contractor,[ directly or indirectly,] through any means of communication [or observation] by [the Company[ or any of its affiliates or representatives] to[ or for the benefit of] the Contractor. Confidentiality Obligations. The Contractor shall hold all Confidential Information in confidence in accordance with the terms of this agreement. Use only for the Purpose. The Contractor shall use Confidential Information solely for the purpose of providing the Services. 
• Announcements. This establishes the manner in which the parties can make public disclosures about the subject of the contract, such as statements about a forthcoming merger or joint business venture.
• Counterparts. This sets forth the right of the parties to execute (sign) copies of the agreement without everyone being present in one place at one time to sign them all.
  sample: Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.  
• Waiver of Breach.  The waiver of any party of a breach or violation of any provision of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach hereof. 
• Advice of Counsel.  Each party hereto, by its due execution of this Agreement, represents that it has reviewed each term of this Agreement with Counsel, and that hereafter no party shall deny the validity of this Agreement on the ground that the party did not have advice of Counsel. Each party has had the opportunity to receive independent legal advice with respect to the advisability of making the compromise and settlement provided for herein and with respect to the advisability of executing this Agreement. 
• Parties Have Not Transferred Rights Or Claims.  The parties each represent and warrant to the other that they have not assigned or transferred to any third party any of the rights, claims, causes of action or items to be released or transferred which they are obligated to transfer or to release as part of this Agreement. 
• Survival Of Representation And Warranties.  The parties agree that all representations and warranties made by them in this Agreement shall survive the termination of this Agreement. 
• Execution of Agreement.  This Agreement may be executed in counterparts. When each party has signed and delivered at least one such counterpart to each party's counsel, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute one Agreement, which shall be binding upon and effective as to all parties. One fully executed original is to be delivered to counsel for each party.  
• Successors in Interest.  This Agreement shall inure to the benefit of, and shall be binding upon, the assigns, successors in interest, personal representatives, executors, estate, heirs, legatees, agents and related entities of each of the parties. 
• Necessary Acts.  The parties agree to perform any further acts and execute and deliver any further documents that may be reasonably necessary to carry our the provisions of this Agreement. 
• Warranties. Ideally you want to have limited warranties, but improving on the standard 90-day warranty may give you a leg up on your competition. Typical warranties state that goods will be free from defects and will conform to designated specifications for a definite period of time.
• Disclaimers. Most sales contracts contain the following standard disclaimer: “There are no other warranties, express or implied, including merchantability or fitness for a particular purpose.” Disclaimers are usually put in capital letters or in boldface type to stand out and to comply with certain provisions of the Uniform Commercial Code (UCC). The UCC helps simplify the laws governing commercial transactions and keeps them uniform among various jurisdictions. However, states often have variations in their commercial codes, so it is important to take that into account.
• Limited-liability claims. A sales contract should attempt to limit your liability. A typical clause for liability states that the seller’s maximum amount of liability is equal to the purchase price. Although clauses that limit liability aren’t always enforceable and won’t necessarily hold up in court, there’s no harm in including a sentence that states you’re not responsible for consequential damages, punitive and speculative damages, or lost projects.
• Price. Make sure the correct price is listed. Any discounts, installation charges, and delivery charges should also be included.
• Price adjustments. If you are entering into a long-term contract, consider how price adjustments will be handled.
• Taxes. Ensure that the purchaser is responsible for all sales tax.
• Payment and credit terms. State when payment is due. If payment is not required immediately, spell out payment terms, including any discounts for early payments or finance charges for late payments.
• Time of the Essence. Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a party of the benefits of any grace or use period allowed in this Agreement.
• Survival. Except as otherwise expressly provided in this Agreement, representations, warranties, and covenants contained in this Agreement, or in any instrument, certificate, exhibit, or other writing intended by the parties to be a part of this Agreement, shall survive for ___ years after the date of this Agreement.
• Ambiguities. Each party and its counsel have participated fully in the review and revision of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply in interpreting this Agreement. The language in this Agreement shall be interpreted as to its fair meaning and not strictly for or against any party. 
• Jury Trial Waivers.  Jury trial waivers. This establishes that when there is a court battle over the contract, the parties agree to have the dispute heard by the judge and to give up their right to a jury trial. Sample: To the fullest extent permitted by law, and as separately bargained-for-consideration, each party hereby waives any right to trial by jury in any action, suit, proceeding, or counterclaim of any kind arising out of or relating to this Agreement.
• Specific Performance. The parties acknowledge that it will be impossible to measure in money the damage to them caused by any failure to comply with the covenants set forth in Section , that each such covenant is material, and that in the event of any such failure, the injured party will not have an adequate remedy at law or in damages. Therefore, the parties consent to the issuance of an injunction or the enforcement of other equitable remedies against them at the suit of the other, without bond or other security, to compel performance of all of the terms of Section , and waive the defense of the availability of relief in damages.
• Representation on Authority of Parties/Signatories. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such party’s obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such party and enforceable in accordance with its terms. 
• Assignment. Neither party shall voluntarily or by operation of law assign, hypothecate, give, transfer, mortgage, sublet, license, or otherwise transfer or encumber all or part of its rights, duties, or other interests in this Agreement or the proceeds thereof (collectively, “Assignment’), without the other party’s prior written consent. Any attempt to make an Assignment in violation of this provision shall be a material default under this Agreement and any Assignment in violation of this provision shall be null and void.

updated: 12/14/15