CONTRACTS: BOILERPLATE CLAUSES IN CONTRACTS
Study Unit
CONTRACTS: BOILERPLATE CLAUSES IN CONTRACTS ~32 min
After the operative provisions of a commercial contract you will usually find the ‘boilerplate’ clauses. They are sometimes called the ‘standard’, ‘general’ or ‘miscellaneous’ clauses, but these names all refer to the same section of the agreement. The boilerplate clauses are placed at the end of the contract and most lawyers think of them as being less commercially sensitive than the operative provisions. In other words, they are less of a risk. For this reason, they are often included with very little negotiation. They do not usually relate to the details of the transaction itself, but to the way that the agreement will be governed. There are some examples of typical boilerplate clauses below.
32. SEVERABILITY If any provision of this Agreement is held to be invalid or incapable of being enforced by a court of competent jurisdiction it shall to that extent be severed from this Agreement and all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect, insofar as the foregoing can be accomplished without materially affecting the economic benefits anticipated by the Parties to this Agreement.
34. FORCE MAJEURE If non-performance of a party hereunder is due to an impediment which is beyond the reasonable control of that party and could not have reasonably been foreseen by that party at the time of conclusion of the contract, and neither the impediment nor its consequences could have been avoided or overcome by the non-performing party, that party’s non-performance is excused. Unless otherwise agreed by the parties expressly or impliedly, Force Majeure events are impediments such as war, civil war or any other armed conflict, military interference by any third party state, acts of terrorism or serious threats of terrorist attack, sabotage, piracy, strike or boycott, blockade, siege, accidents, fires, explosions, plagues, or natural disasters, including but not limited to, storm, cyclone, hurricane, earthquake, landslide, flood, drought or any event of a similar nature.
35. GOVERNING LAW AND JURISDICTION This Agreement shall be governed by and construed in accordance with the laws of England and Wales and the parties hereby submit to the exclusive jurisdiction of the courts of England and Wales.
36. COUNTERPARTS This Agreement may be executed by the parties hereto in any number of counterparts, including by facsimile or electronic signature included in an Adobe PDF file, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. The execution of counterparts shall not be deemed to constitute the conclusion of this Agreement by a party until the other party has also executed and delivered its counterparts. If this Agreement is translated into a language other than English, and if the translated version is different from the English language version, the English language version shall prevail.
37. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties in relation to its subject matter and supersedes all previous agreements, arrangements, undertakings or proposals, whether written or oral, between the parties in relation to its subject matter. Each party acknowledges that it has not relied upon and shall have no remedy in respect of any statement, condition, representation or warranty other than as expressly set out in this Agreement, unless fraudulently made.
Read the extracts from a contract opposite, then answer the following questions.
1. Which clause states how the contract will be interpreted if there is a dispute? 2. Which word in the clause means ‘interpreted’? 3 Which clause states that if anything in the contract is void it can be cut out of the contract and the rest of the terms and conditions will continue to be effective? 4 Which word in the clause means ‘cut out’? 5. Which clause states that the contract may be made up of several identical copies of the same document, which together will form one binding agreement? 6. Which word in the clause means a single, formal, written document which is evidence of a legally enforceable agreement? 7. Which clause states that if fulfilling an obligation becomes impossible for one of the parties due to an event that could not have been predicted, then that party will not be liable for breach? 8. Which word in the clause means something which is a serious obstruction to performing an act, which may even make it impossible to perform that act? 9. Which clause states that this agreement represents the whole, complete agreement between the parties and that nothing else is included in the agreement between them? 10. Which word in the clause means that this agreement replaces any previous agreement between the parties?
Choose the highlighted phrase in the contract that means the following:
1. changing things in a significant way; changing a situation considerably, especially in relation to possessions and money 2. will not be considered as the moment a binding contract is formed 3. will be more powerful; will have control 4. approved in a legally binding way by the parties, either in direct written or spoken word, or in some other way, such as by conduct 5. to the extent to which the statement I have just made can actually be done 6. has not taken into account when deciding to enter into the contract and understands that it cannot later make a claim concerning this 7. a reasonable person could not have predicted that this would happen 8. agree to make yourself subject to a process that is decided by others 9. signed by the parties to this contract 10. a court with the proper authority to hear a particular dispute
Refer back to the contract, then answer the following questions.
1. After the contract is signed by both parties they discover that it contains a clause that is not legal in one of their jurisdictions. What can the parties do about this? 2. There is a dispute between the parties and one of them wants to settle it by arbitration. What does the contract say about this? 3. What are the two ‘elements’ stated in the contract that a party would need to prove in order to rely on the force majeure clause when failing to fufil an obligation? 4. This contract was originally drafted in another language and then translated into English. The two versions are different concerning an important right of one of the parties. What happens?
Speaking & Writing for this topic
Two short tasks scored against TOEFL rubrics. The prompt is generated for this topic — use the vocabulary you have just studied.