Understanding Basic Contract Provisions

Many of your standard contracts are built using “boilerplate language.” What? Don’t worry, we’ll break it down for you in

Part 1 of Our Boilerplate Provisions Series!

What is Boilerplate?

Boilerplate is essentially a colloquial word for the terms and provisions in contracts that are standard and seen across the board in similar contracts. For instance, if you have a contract for selling an item to a buyer, there may be a term in that selling contract that uses standard language, and many other contracts of that kind (selling an item) also use that standard language.

The language is interpreted similarly across court, which means that should an issue arise, the court looks at that standard term and says “yeah, this is familiar and it means XYZ.” Interpretation MATTERS because if a conflict arises (a lawsuit) the court is the body (whether it be by judge or jury) that will take your contract, look at the facts of your case, and interpret how the facts apply to your contract. How does the contract, as stated, determine who will basically win the argument?

So contracts and boilerplate are kind of a big deal.

Does that make sense? Bear with us here, this is the start of a multi-part series where we will break down common boilerplate provisions in different categories of contracts.

Our Series Features Explanations of Boilerplate Language in:

  • Disclaimers and Waivers

  • Limitation of Liability and Indemnity

  • Attorney’s Fees and Litigation Costs

  • Arbitration Clauses

  • Modification Clauses

  • Choice of Law and Venue Clauses

So follow along for a quick look at what boilerplate is in general and how it functions in a contract.

A Quick Look at Some Boilerplate

Here are some examples of standard language. They look funky, but it’s because they are drowning in legalese (the jargon that lawyers speak in).

Example 1:

“Delay in performance is a material failure of consideration only if time is of the essence, i.e., if prompt performance is, by the express language of the contract or by its very nature, a vital matter.”

This provision says in about 20 words too many that — time is of the essence. If one party to the contract takes too long to complete their end of the deal, then a contract with this provision gives the other party the right not to perform on their end of the bargain.

Practical consideration → the court may consider things like “what is a reasonable amount of time” in this industry or field when making the determination if the party really did take too long. But if a conflict arises, this term gives the party that is waiting, the ability to state in general, “hey man, you’re taking too long, we’re not completing our end of the deal anymore.”

1. Witkin, SUMMARY OF CALIFORNIA LAW (10TH), Contracts §815, at 907 (2005).

Example 2:

“Each Party shall deliver all communications in writing either in person, by certified or registered mail, return receipt requested and postage prepaid, by facsimile [or email] (with confirmation of transmission), or by recognized overnight courier service, and addressed to the other Party at the addresses set forth above [(or to such other address that the receiving Party may designate from time to time in accordance with this section)].”

Oh boy. This looks daunting, but this term lays down the rules for communication. A contract with this provision means that the parties want their communications to be very official, formal, and in writing.

Practical considerations → keeping all communications in writing is helpful when gathering evidence for the purposes of a lawsuit or potential conflict. However, most business relationships often don’t require this excessive level of formality for all their communications. Frankly, constant formality might not be practical. This might be a provision that’s attached to a term regarding modification of the contract. If the parties want to alter the arrangement a bit, then super formal writing might be necessary to document the change. Generally, keeping emails, noting down phone calls, and that sort of idea – is the kind of writing that might be helpful to practice on the day-to-day.

Do Contracts Just Have Boilerplate Language Automatically?

Some might, it really depends on the type of contract! Certain breeds of contracts are built to have boilerplate provisions. Some contracts are more specified, but many have boilerplate provisions built into certain sections like choice of law and venue terms.

The person drafting your contract may feel the need to have some standard terms in your contract. Never be afraid to ask your legal team – “what the heck does this gibberish mean?” Lawyers love to talk and we prefer clients understand the legalese and what they’re agreeing to, as opposed to stumbling into an arrangement.

2. Practical Law Commercial Transactions, General Contract Clauses: Boilerplate Clauses (Short Form) (CA)

We hope this was helpful, please check out the rest of our Boilerplate Language Series to learn more about standard provisions in different categories of contracts!


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