Boilerplate clauses are standard legal language drawn from the extensive legal experience of big firms or companies. Most contracts contain a series of boilerplate clauses which often appear under the heading “General” or “Miscellaneous”. These are often overlooked when drafting an agreement and, due to their supposed “standard” status, are rarely reviewed with as much scrutiny as other clauses. However, failing to review them in the context of each deal can be dangerous. One of the most common errors by lawyers drafting agreements is to “cut and paste” boilerplate language from a previous agreement into a new agreement, often resulting in mistaken party names or irrelevant clauses being added to the agreement. Standard forms may or may not be applicable to a particular situation and may have been drafted for the benefit of the opposing party. Boilerplate clauses should merely be used as a starting point and must be customized for a particular transaction.
The example below demonstrates the danger of boilerplate clauses:
Entire Agreement Clause
This Agreement represents the entire agreement between the Parties and any previous understandings and agreements between the Parties, whether oral or written, are hereby null and void.
The above entire agreement clause (also called a merger or integration clause) is typical language included in many contracts. However, if the parties to a contract have had previous dealings and entered into multiple, unrelated agreements, the above clause would effectively nullify all such agreements. In such a case, the entire agreement clause should be limited to cover only those previous agreements which deal with the same subject matter as the newly-drafted agreement.