Skeletons in the back pages: why boilerplate clauses deserve a second look

Boilerplate clauses are generally found in the last few pages of a contract, where the ‘general’ or ‘miscellaneous’ clauses live. These clauses are often copied from one deal to the next, rarely negotiated and hardly ever read. That is, until a dispute arises.

In that situation, English courts will apply them exactly as written. They will not rewrite a deal to rescue an injured party from a bad bargain; they place a high value on certainty. Four situations often catch businesses out, and this article explains how to avoid your business falling foul of them.

1. Entire agreement

Unless something is written directly into the contract, things you thought you could rely on – for example, promises in a sales pitch, an unsigned side letter or an email – may simply fall away. The entire agreement clause says that the written contract is the whole deal.

Make sure that key promises or documents you seek to rely on are written into the contract itself and that this clause is modified accordingly.

2. Force majeure

It’s often assumed that including a force majeure clause and labelling it as such will cover a party for any failure to perform caused by events outside its control, such as a pandemic or cyber-attack.

However, force majeure is not defined in English law, so the clause cannot be treated as a catch-all if your contract doesn’t specifically mention the event. It’s therefore important to test your clause against realistic risks before you need to rely on it.

The clause should generally cover events which are extraordinary in nature, are outside a party’s reasonable control and could not have been foreseen.

3. Oral modifications

Most contracts include a clause stating that any change to the contract itself must be made in writing and agreed between the parties. This may catch you out if you believe you have agreed something verbally with the other party, whether in person or by phone, as the court may find the change invalid if it hasn’t been recorded in writing.

Price changes, new deadlines and revised specifications may all be discussed in this way, but if your contract requires a signature, those changes may not be valid in practice. Check your contract to establish how changes must be formally recorded and make sure your team is aware of the requirements too.

4. Notice clauses

These clauses set out how important steps, such as ending the contract or making a claim, must be taken. They are particularly important in the event of a dispute, yet they are often overlooked.

Common mistakes include sending the notice to your usual contact instead of the address specified in the contract, using the wrong delivery method or calculating timeframes incorrectly.

Key takeaways

• Read the back pages. It may seem obvious after reading this article, but make sure each clause reflects how you actually trade and that the agreement covers the conversations you have had in practice
• Put what matters in writing. If it’s not in the contract, you may not be able to rely on it
• Stress-test your force majeure clause. Ask yourself: what happens if there is a supply chain failure or a cyber incident?
• Record every change. Use a signed written variation whenever an important change occurs.