Boiler Plate - A New Definition
If you’ve ever written, read or negotiated a contract, you will recognize the term “boiler plate” (sometimes spelled “boilerplate”). It’s an often misused and misunderstood term used to describe a series of miscellaneous contract provisions which are often included towards the end of a contract. Sometimes these provisions are listed under the catch all captions of “Miscellaneous” or “General”. Two misconceptions we often hear are: 1) boiler plate is unimportant and 2) boiler plate terms are somehow implied into a contract regardless of if they are included or not. Both assertions are wrong.
The idea that boiler plate is unimportant or contractually implied couldn’t be further from the truth. So what is boiler plate exactly? Well, the dictionary defines it as follows: Boiler Plate - Webster’s: “the detailed standard wording of a contract, warranty, etc.”. There’s a real problem with this definition. It’s simply incorrect, there is nothing about boiler plate that has to be standard. While it may often look similar from one contract to the next, upon closer inspection what’s in one contract may have little relation to what’s in another. Additionally, contract boiler plate does not require that certain provisions be included or excluded and the language in each provision is just as negotiable as the rest of a contract’s terms and provisions. For example, boiler plate doesn’t have to be mutual and quite often is one sided.
We’d like to propose a new definition for boiler plate: “Boiler Plate: a variety of contractual provisions so important that they should be included in all well written contracts.” Boiler plate should be carefully drafted for the particular transaction. Draft all of your contract provisions carefully. A cut and paste approach could leave your company more exposed than if it had kept the boiler plate terms out entirely.
In our practice we see boiler plate come into play most frequently when there is a dispute. Before parties engage in litigation over a contract dispute the boiler plate has to be fully reviewed. It should include key issues which may dramatically affect litigation like: Attorney Fees, Costs and Expenses; Dispute Resolution, Venue, Choice of Law, Jurisdiction, Arbitration, Mediation, etc.
Below is a list of what we’d call the top 10 boiler plate provisions. The drafting and inclusion of boilerplate is always done on a case by case / deal by deal basis. Sometimes there is more, sometimes less. But this list gives a good overview of what should be considered.
For most contracts, these would be considered critical contract provisions:
1. Entire Agreement
2. Attorney Fees
5. Severability & Reformation
7. Force Majeure
8. Third Party Beneficiaries
9. Successors & Assigns
The boiler plate is a fundamental portion of any contract. It should always be carefully considered and thoughtfully drafted. If it isn’t, valuable space in a contract is being wasted and those miscellaneous terms at the end may end up doing more harm than good.
(Mallon & Lonnquist, LLC, is a business, finance, real estate, and litigation law firm. Craig T. Watrous is a Colorado business attorney who regularly represents clients in business transactional matters. Craig can be reached at firstname.lastname@example.org.)