BOILERPLATE CLAUSES
INTRODUCTION
Boilerplate clauses are the standard clauses inserted into all agreement. These can be very important
and will often be subject to negotiation.
In the exam, the question might ask what the function of a certain boilerplate clause is (see below the
purpose of each clause), or what elements might be important to include when drafting (see below
the drafting points for each clause).
THE CLAUSES
i) ASSIGNMENT OR NON-ASSIGNMENT CLAUSE:
• Purpose: to prevent assignment of a benefit w.o other’s consent (else common law position allows
for free assignment)
• Drafting points:
• Consent for assignment
• Requirement of the party to act reasonably
• Assignment to named third parties (e.g Group Companies)
• Or make it that either may with the consent
ii) THIRD PARTY RIGHTS
• Purpose: exclude non-parties from enforcing rights under CRTPA 99 (under which says they have
stat right enforce a term if contract expressly provides he may or if term purports confer a benefit on
him)
• Drafting points:
• May include ability of parties to rescind contract/vary w.o third party consent
iii) ENTIRE AGREEMENT
• Purpose: prevent reliance on any statements and pre-contractual representations except as set out in
the agreement to provide commercial certainty
• Drafting points:
• Delete or amend if there are side letters/ancillary documents (e.g Confidentiality Agreement to the
main document)
• Refer to specific side documents as necessary
• This is the entire and only agreement
• That it supersedes all prev agreements
• Only remedy = for breach of Contract/Agreement
• Does not exclude or limit liability for fraud
• Generally included as standard in all commercial agreements
iv) FORCE MAJEURE
• Purpose: prevent parties from being held liable for events outside parties’ control, and where
performance rendered impossible
• Drafting points:
• Definition of force majeure and what events are included - including any ‘sweep up’ provision
• Typical events of force majeure include “acts of God, adverse weather such as floods or snow, war,
riot, government action and industrial action by third parties”.
• Option to suspend up to specified time or terminate based on circumstances
• Notice requirement and when
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, • Time period for suspension (long-stop date) + Termination at the end of time period specified w.o
liability
v) TERMINATION CLAUSE
• Purpose: prescribe both grounds for termination & procedure to be adopted (and sometimes certain
consequences) in terminating the contract.
• Drafting points:
• Material breach requirement? What is meant by material?
• Terminating party required give advance Notice and how is this notice period to be calculated?
• Allow the other party an opportunity to remedy the breach first? If so, for how long?
• Consequences of termination?
• Reasons for termination may inter alia relate to insolvency, breaches of payment, right to cancel,
disagreement
• Do any rights and obligations under the agreement continue/survive and if so how long for?
vi) SURVIVAL CLAUSE
• Purpose: ensuring certain clauses will continue to be binding upon parties even after termination/
expiry of agreement
• Example: the provisions of clauses 11 (confidentiality) and 12 (post-termination covenants) shall
survive the expiry or prior termination of this Agreement.
• Typical clauses you may want to survive
• Confidentiality
• Post-termination restrictive covenants
• Indemnities; and
• Governing law & jurisdiction/arbitration
vii) GOVERNING LAW & JURISDICTION
• Purpose: for the sake of clarity.
• Drafting points:
• Two elements - law applicable and jurisdiction where disputes to be heard
• No rule that both must refer to the same country
• Parties can choose whether courts’ jurisdiction exclusive or non-exclusive
• Ensure covers any claim, dispute or difference arising out of or in connection with this Agreement,
including any question in relation to its existence, validity or termination or the legal r/s established
by this Agreement.
• Exclusive!
viii)NOTICES CLAUSE
• Purpose: provide for places where notice is to be served method and time at which notice deemed
to be served.
• Drafting points:
• Most will not allow oral notice - Require writing for evidential certainty.
• Signed by the party serving notice
• To whom it should be addressed
• Give e.g of deemed service
ix) SEVERANCE
• Purpose: aims to ensure that if any clause is declared to be illegal, unenforceable or invalid (in whole
or in part) capable of being severed from contract at discretion of court.
• Intention = remaining contract/part of particular provision will remain valid & enforceable.
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INTRODUCTION
Boilerplate clauses are the standard clauses inserted into all agreement. These can be very important
and will often be subject to negotiation.
In the exam, the question might ask what the function of a certain boilerplate clause is (see below the
purpose of each clause), or what elements might be important to include when drafting (see below
the drafting points for each clause).
THE CLAUSES
i) ASSIGNMENT OR NON-ASSIGNMENT CLAUSE:
• Purpose: to prevent assignment of a benefit w.o other’s consent (else common law position allows
for free assignment)
• Drafting points:
• Consent for assignment
• Requirement of the party to act reasonably
• Assignment to named third parties (e.g Group Companies)
• Or make it that either may with the consent
ii) THIRD PARTY RIGHTS
• Purpose: exclude non-parties from enforcing rights under CRTPA 99 (under which says they have
stat right enforce a term if contract expressly provides he may or if term purports confer a benefit on
him)
• Drafting points:
• May include ability of parties to rescind contract/vary w.o third party consent
iii) ENTIRE AGREEMENT
• Purpose: prevent reliance on any statements and pre-contractual representations except as set out in
the agreement to provide commercial certainty
• Drafting points:
• Delete or amend if there are side letters/ancillary documents (e.g Confidentiality Agreement to the
main document)
• Refer to specific side documents as necessary
• This is the entire and only agreement
• That it supersedes all prev agreements
• Only remedy = for breach of Contract/Agreement
• Does not exclude or limit liability for fraud
• Generally included as standard in all commercial agreements
iv) FORCE MAJEURE
• Purpose: prevent parties from being held liable for events outside parties’ control, and where
performance rendered impossible
• Drafting points:
• Definition of force majeure and what events are included - including any ‘sweep up’ provision
• Typical events of force majeure include “acts of God, adverse weather such as floods or snow, war,
riot, government action and industrial action by third parties”.
• Option to suspend up to specified time or terminate based on circumstances
• Notice requirement and when
Page 1 of 6
, • Time period for suspension (long-stop date) + Termination at the end of time period specified w.o
liability
v) TERMINATION CLAUSE
• Purpose: prescribe both grounds for termination & procedure to be adopted (and sometimes certain
consequences) in terminating the contract.
• Drafting points:
• Material breach requirement? What is meant by material?
• Terminating party required give advance Notice and how is this notice period to be calculated?
• Allow the other party an opportunity to remedy the breach first? If so, for how long?
• Consequences of termination?
• Reasons for termination may inter alia relate to insolvency, breaches of payment, right to cancel,
disagreement
• Do any rights and obligations under the agreement continue/survive and if so how long for?
vi) SURVIVAL CLAUSE
• Purpose: ensuring certain clauses will continue to be binding upon parties even after termination/
expiry of agreement
• Example: the provisions of clauses 11 (confidentiality) and 12 (post-termination covenants) shall
survive the expiry or prior termination of this Agreement.
• Typical clauses you may want to survive
• Confidentiality
• Post-termination restrictive covenants
• Indemnities; and
• Governing law & jurisdiction/arbitration
vii) GOVERNING LAW & JURISDICTION
• Purpose: for the sake of clarity.
• Drafting points:
• Two elements - law applicable and jurisdiction where disputes to be heard
• No rule that both must refer to the same country
• Parties can choose whether courts’ jurisdiction exclusive or non-exclusive
• Ensure covers any claim, dispute or difference arising out of or in connection with this Agreement,
including any question in relation to its existence, validity or termination or the legal r/s established
by this Agreement.
• Exclusive!
viii)NOTICES CLAUSE
• Purpose: provide for places where notice is to be served method and time at which notice deemed
to be served.
• Drafting points:
• Most will not allow oral notice - Require writing for evidential certainty.
• Signed by the party serving notice
• To whom it should be addressed
• Give e.g of deemed service
ix) SEVERANCE
• Purpose: aims to ensure that if any clause is declared to be illegal, unenforceable or invalid (in whole
or in part) capable of being severed from contract at discretion of court.
• Intention = remaining contract/part of particular provision will remain valid & enforceable.
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