Authored By: SYDNEY EFFAH ACHEAMPONG
GHANA SCHOOL OF LAW
Introduction
Contracts are entered into everyday by diverse personalities. From the local market place to the cafteria to the showroom to conference halls, negotitions are undergone and agrements are entered. These agreements, where not fulfilled lead to disputes, which come with them complex litigations. Certain clauses shape up the contract to ensure that there is clarity. From the law governing the said contract to measures that fully discharge the parties of their respective obligations, these clauses ensure that there is the absence of contrariety in the stipulations made in the contract. These clauses are termed boilerplate clauses. This article examines the nature, examples and importance of boilerplate clauses, thereby proving that boilerplate clauses, contrary to popular thought, are not just some statements you use to beef up a contract but are terms that shapen the whole contract and give it direction.
What is a boilerplate?
They are seen as the miscellanous or not-so prioritised statements in the contract. In a generalsense, these are standard clauses usually found in written agreements irrespective of the subject matter. They are ready-made or all-purpose language that will fit in a variety of document. This shows that boilerplate clauses can cover diverse fields, features and components of the contract at hand, ensuring an overall stte of clarity and certainty regarding the contract, the parties and the obligations each party is to perform under said contract. They are contractual terms found at the end of the contract. They hold the contract and the obligations involved together. Boilerplate originally referred to steel plates used in construction of durable boilers in the manufacturing industry.
As already stated, boilerplate clauses, as a term, encapsulates different types of terms. Sone of these terms include non-third party rights clause, which prevent non-signatories from enforcing the stipulated terms in the contract, entire agreement, which clouds any previous agreements that were made outside of the stated contract, force majeur clause, which protects parties from events beyond their control, severability clause, which gives off the ‘cut the rot off’ purpose and others. The subsequent paragraphs will further explain the mentioned clauses, as well as other common ones implemented.
Explanation of some boilerplate clauses
The first boilerplate to be elaborated is the severability clause. This clause provides that in the instance where a particular term in the contract is invalid or inconsistent with the laws governing the contract, it does not render the whole contract invalid. This clause grants each term in the contract its distinct validity status when measured by the governing law. It will however, according to the court in the case of SAS Institute Inc. V World Programming Ltd. only be accepted if the remainder of the agrement is sensible and is intelligible.
The second boilerplate clause is the Governing Law clause. Every contract is governed by a body of law belonging to a state. Thus, the governing law clause determines which body of laws from which country would preside over the contract. This is agreed on by the parties, based on their own set criteria, irrespecive of where the disagreement arises.
The next clause to be explained is the non-third party clause. This clause ensures that aside the party to the contract, no other persons can call for the enforcement of the terms of the contract. This restricts the enjoyment of implementation and enforcement rights to only the partis to the contract.
There is also the dispute resolution clause. There is the likelihood for dispute to arise from a contract due to certain factors such as undefined terms stated in the contract. This clause provides the avenue, mode and diverse components that are to be undergone in order to ensure that these disputes are resolved within the shortest possible time.
Importance of boilerplate clauses
Boilerplate clauses are usually seen as mere filler terms in a contract. This should, however, not be the case as they make a lot of determinations in the contract. They carry much weight and can make or unamke a contract and the obligations spelt out under it. They lay the solidly nondiscriminatory groundwork for all modern contractual framework.
Boilerplates provide a sense of certainty to the parties to the contract. Boilerplate clauses are generally clear and concise. Taking Force Majeur cluase for instance, this clarifies all the events where there will be a discharge of the parties from their respective obligation under the contract without being penalised. The Dispute Resolution clause also clearyl state the avenues that are be visited when dispute arises fron the agreement. Further, the Governing Law clause gives clarity regarding which law presides over the contract and which law sets the standards for the terms inserted in the contract. These clauses possess a defining ability in certain contracts, which cannot be overlooked.
Boilerplate clauses also regulate enforceability of the agreement. These clauses are able to define aspects of the contract that are to be enforced and who can enforce the contract. For instance, the Entire Agreement clause gives the parties the limit to which they can enforce, in that, the parties cannot go beyond the current agrement with the aim of enfocring other communications had between the parties. Also, the Non-Third Party clauses ensures that the enforceability right to the contract stays between the parties to the agreement, eiminating the chance of other beneficiaries to the contract from enforcing said contract due to the fact that they are not parties to the contract. The Governing Law clause also ensures that the agreement has a set of laws under which it can be enforced, thereby assuring the parties of the other’s compliance to the terms of the contract.
Finally, boilerplate clauses provide uniformity. Boilerplate clauses provdie coherence in the agreement as well as the framework backing it. Where the clause’s frame is standardised, it assures the parties to the contract of a predictable outcome and in the instance where it is done with different parties, fairness is assured. There could be the inclusion of the non-discriminatory commitment, which would ensure that each party earns their rightful reward. The Dispute Resolution also gives a predictable system, especially where the methods and transitions of conflict resolution are mentioned.
Conclusion
Boilerplate plates are essential, time saving clauses. The systems they set and the enforceability they come with go a long to secure the agreemnt and the parties to that agreement. They are therefore not to be taken for granted, as their absence or wrongful drafting can severely harm and jeopardise a contract.
REFERENCE(S):
- Black’s Law Dictionary, 8th ed.
- https://www.docupilot.com/blog/boilerplate-contract#:~:text=%27boilerplate%27%20referred%20to%20steel%20plates%20used%20in%20constructing%20durable%20boilers%20in%20the%20manufacturing%20industry
- Prof. Paul Obo Idornigie, ‘Understanding Boilerplate and Commercial Clauses’ pg. 1
- SAS Institute Inc v World Programming [2010] EHWC 1829
- Shashwat Kaushik, ‘The importance of boilerplate clauses’https://blog.ipleaders.in/the-importance-of-boilerplate-clauses-an-insight/
