‘Respecting Boilerplate’ — second edition
By Robert A James
Boilerplate refers to the legal clauses of general application typically found at the very front and very end of complex agreements (or the flip-side of printed forms or the ‘click-through’ screens of online forms). This pejorative term comes from the days when big-city publishers would mould lead plate or paper mats — similar in appearance to the iron or steel plates riveted together to encase boilers — bearing raised type (‘stereotype’, another pejorative term) with the fixed text of articles and advertisements. Smaller newspapers would print the boilerplate without change.
‘Boilerplate’ therefore connotes both the strength and the unchangeability of the metal that contains a pressure vessel. Neither meaning is truly applicable in the legal setting. First, many terms leave significant vulnerabilities, with opportunities for vagueness, ambiguity and uncovered cases. Second, there is a surprising degree of variation in even the most standard clauses — between drafters, across industries and among contract types.
For all but contracts of adhesion, no clause need be accepted as is. However, the pace of today’s negotiations usually means that scant attention is paid to the boilerplate. Most time in dealmaking is consumed first in establishing the price, the asset or scope description and the representations and warranties, and then in defining and satisfying the conditions precedent. The paradox is that if a transaction is successful, little of that hard work has ongoing value — the final price and asset or scope definitions are what they are; the conditions go away when the deal closes; and the reps expire shortly afterwards. Instead, it is the lowly boilerplate and the questions it may or may not answer — can you assign the contract to an affiliate and can you disclose the contract to a prospective buyer? — that have enduring relevance, whether or not the parties gave any active thought to them…
Click on the link below to read the rest of the Pillsbury briefing.
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