It’s Never Just Boilerplate

It's Never Just Boilerplate by Rebecca Gray for Contract NerdsThough there are a handful of clauses that can be added to almost any contract without modification, most of the language we lump under the umbrella “boilerplate” is anything but one-size-fits-all. As Sterling Miller puts it, “[t]his is where you find the real action in any commercial agreement.”

I tend to think of boilerplate as the legal underpinnings of the deal. Your operations or sales team may negotiate most, or all, of the deal-specific terms. But they expect their legal department to make the contract itself airtight.

In the fine-print sections, this means:

  • Choosing the right “standard” clauses for this particular deal;
  • Tailoring them to the circumstances at hand; and
  • Making them consistent with each other and the rest of the contract.

This is why experienced contracts professionals never see boilerplate language as just boilerplate.

It’s strong stuff.

Which parts of your contract are boilerplate? There’s no definitive list. In part, because it depends on the particular deal at hand. But the term “boilerplate” is, itself, a helpful guide.

The word boilerplate originally referred to iron that had been rolled into large, flat plates for use in steam boilers. Specialized foundries used only the highest grades of wrought iron for this critical, high-pressure application, making the name a selling point for other products. A 1918 advertisement for an American Boiler Plate furnace proclaims that it “conserves fuel and is built for long years of hard usage.”

At its best, this is exactly what contract boilerplate does. Start with quality workmanship, then apply and assemble it properly, and you should have a legal framework strong enough to prevent contract explosions and collateral damage while minimizing and streamlining any disputes between the parties.

It’s (somewhat) standardized.

By the late 1800s, printers and editors were using the term “boilerplate” as a shorthand for stereotypes, which were lightweight paper molds that allowed early syndicators to ship prefabricated feature stories and ads to local papers.

No one really knows why stereotypes were nicknamed “boilerplate.” Search the internet, and you’ll find lawyers pontificating that printers used steel taken from the boilers of decommissioned ships to create these slabs of text. Not true. Fact check your blog posts, kids! It’s more likely that these cut-and-paste paper printing molds simply reminded 19th century newsmen of the standardized iron plates that riveters pieced together into steam boilers.

Boilerplate quickly became synonymous with preset type, and even frowned upon, because it was standardized and required fewer resources than locally produced content. Despite this prejudice among journalists, it didn’t take long for “editors of small, and even of prosperous papers,…to discover that better matter was going out in the plates than they could afford, individually, to pay for” (attributed to “The Journalist Souvenir” 1887).

Creative, original work may be the ideal in journalism, but in the law—particularly contract law—no good comes from reinventing the wheel. Our job is recognizing what the circumstances require, assembling the best examples and templates to start from, and understanding how and where to revise (or rewrite entirely) to meld these pieces into a roadmap that will facilitate smooth execution of the deal while protecting both parties from undesirable outcomes. Yes, you heard me, both parties. Scorched earth tactics rarely serve anyone’s interests in a commercial transaction.

Some of it requires significantly more care and attention.

I find it helpful to think of contract boilerplate in three broad categories.

The first—and easiest to deal with—includes clauses that really can be uniform across contracts. Here there are right and wrong answers and all you need is a good checklist of language you are happy with and a moment or two to fill in the blanks.

The second category is made up of standard clauses where there are choices to be made, but those decisions are binary or limited in scope.

Our final group of contract boilerplate includes all the big hairy problem clauses. Even the simplest among them require deal- or industry-specific thought and language. Others—clauses that limit or shift risk associated with the deal—are often heavily negotiated and not necessarily standard at all. These beauties require independent treatment.

It’s a crucial part of creating the “law of the deal.”

We call it boilerplate because it’s not unique to the transaction at hand. Even when starting with a blank page, we don’t begin without reference points and guidelines.

But the beauty of contracts is that they allow us to create private law. The law of the deal, if you will.

An educational Investopedia piece claims that the term boilerplate “was used in the legal profession in the mid-1950s to describe how companies used fine print to get around the law.” While we might not agree with that description, it is true that most contract boilerplate is there specifically to change the default outcome under the law.

An (in hindsight, amusing) 1954 newspaper article reported that Pennsylvania was putting a stop to “the all too prevalent practice of including in fine print of ‘boiler plate’…terms waiving or modifying fundamental provisions of statutory law which would otherwise govern the transaction.”

Perhaps thankfully for us Contract Nerds, the adoption of the UCC didn’t exactly put an “End To ‘Fine Print’ In Contract” as the Altoona Tribune’s headline claimed it would. But it is true that if you’re careless with boilerplate, you may end up with default gap fillers that don’t at all match the intent of the parties. In the immortal words of Sterling Miller, “if you ignore or skip lightly through the boilerplate, you are begging for problems or surprises down the road.”

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Stay tuned! In coming weeks, we’ll be rolling out a series of separate articles outlining key considerations to keep in mind as you’re working with some expert-level clauses, such as indemnification and arbitration.

© 2021 The Entrepreneur’s Lawyer®

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