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Common Clauses – Breaking down Boilerplate

Updated: Nov 11, 2023

A big part of any business law practice is drafting, reviewing, and negotiating contracts. This requires familiarity with the parties, their goals in entering the contract, and brainstorming worst-case scenarios.

All of that is absolutely critical. But contracts almost always include so-called “boilerplate” terms. Parties to a contract often ignore these because 1) they can be hard to understand, 2) they can be boring to read, and 3) there is a perception that they don’t matter.

Points 1 and 2 are often true. 3 is never true.

Boilerplate terms can have dramatic results in litigation or alternative dispute resolution, and can even affect what remedies available, among other things. They can limit whom you can sue and for how much. Why does the homeowner want to be sued in Texas? Why does the lender want to sue in New York? Why do I have to go to mediation first? Do I have to arbitrate? What if part of the contract isn’t enforceable? Everyone is in California, why are we using Arizona law? Why am I limited to $100,000 in damages when I suffered $1 million?

“Common Clauses” will be a series of short posts about clauses that you’ll find in a lot of contracts, what they mean, and how to approach them. Most you’ve seen before. I imagine you’ve actually read very few of them. The point of this series is to break you of that habit.

Edit: Here is a running table of contents for this series:

  1. Authorization to Enter Contracts (July 29, 2022)

  2. Integration and Merger (August 2, 2022)

  3. Construing against the Drafter? (August 4, 2022)

  4. Venue Selection (August 22, 2022)

  5. "Time is of the Essence" (October 5, 2022)

  6. Headings for Information Only (April 25, 2023)

  7. Severability (August 4, 2023)

  8. Alternative Dispute Resolution (November 11, 2023)

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