They’re those weird but common sections and phrases you often find at the bottom of your contract— the seemingly standardized text we sometimes call “boilerplates.” You may find yourself skimming over these and taking them for granted, but boilerplate sections in contracts often carry some pretty important elements. These sections often include what lawyers call ‘magic language’, that is, words with specific purposes and uses. (And they’ve sometimes been litigated pretty thoroughly for their elements and enforceability.)
These types of clauses can be pretty nuanced with quite a bit of case law surrounding their interpretation, so it’s important to draft carefully and if possible, have an attorney draft and review your contracts, even these seemingly standard provisions!
Here are just a few simplified examples and what they actually mean:
The Notice Clause
Simplified Example: “Notice shall be given via email with confirmation upon receipt.”
You will always want to include a specific procedure for how a party notifies the other party when it comes to important communications, such as changes to the contract, termination, or issues. You’ll want it to be in some form of writing so there’s a record of the notification, and you can determine what would constitute effective delivery — whether that’s a certified USPS mail with a tracking confirming delivery or requiring the other party to confirm receipt.
The Integration Clause
Simplified Example: “This contract constitutes the entire agreement between the parties.”
In many cases, you’ve had several discussions before the contract even comes into play, or you may verbally talk about something even after the contract is signed. These can be quotes and estimates, a phone call, or other communications about how a relationship is going to/currently is working. This integration clause intends to make it clear that all those discussions and representations are not relevant (unless they’re explicitly stated they intend to be a part of the contract or part of a validly agreed to amendment). If this clause is in your contract, and it’s written well, components of prior agreements or communications often cannot be brought up in court unless in certain scenarios (like to help clarify ambiguity). If you have this clause, it’s important to make sure your contract and amendments include everything you agreed upon, because all those other discussions might not matter in the end.
Jurisdiction/Choice of Law Clause
Simplified Example: This contract is governed by, and to be construed in accordance with, the laws of Pennsylvania with jurisdiction lying in the courts of Allegheny County.
Parties to a contract are not always in the same town so they need to agree on what laws apply and what courts they will bring disputes to. Jurisdiction refers to the territory where a court has the power/authority to interpret the law. Because laws are different state-to-state and beyond, the parties can be in agreement as to which laws they want to apply and to which specific contract. There are many procedural rules and court cases surrounding these clauses in contracts, there enforceability, and there are certainly legal strategies around various court interpretations that might be more beneficial to you, so you want to work with an attorney to make sure your contract’s jurisdiction/choice of law makes the most sense for you and the contract relationship.
The Assignments Clause
Simplified Example: this agreement cannot be assigned or transferred by either party without the written approval of the other party
An assignment is when you transfer all or part of your contract duties to another party. The assignment clause will determine the scope of when you can and can’t do this. Oftentimes you want to limit when this can happen so you don’t all of a sudden have to work with a different party without your approval.
The Amendments Clause
Simplified Example: No amendment, modification, or supplement to this contract shall be binding unless executed in writing by the Parties.
You want to make clear that changes to the contract have to be in writing and agreed upon between both parties. You can even use our amendment and addendum template from the template library!
The Waiver Clause
Simplified Example: Failure by Company to enforce a right or seek a remedy under this contract shall not be construed as a waiver of such rights/remedies.
This clause essentially explains that just because you might not have pursued a legal remedy or enforce a contract term in one scenario, does not mean you cannot do so another time. You can always be “nicer” than your contract allows, such as waiving a late payment penalty or allowing for more rounds of revisions to a deliverable than the contract specifies. But a properly drafted waiver clause can help you start pursuing those options further down the road without your ‘niceness’ becoming a modification to the contract.
There are many other clauses that may seem unimportant but can become very relevant in helping you seek a remedy or relief in a contracts issue. Learn more about contract clauses to be sure to have in the first blog in this series all about termination clauses, and our blog posts about clauses you’ll be thankful to have and what to watch out for. And check out our resources on next steps after a client contract is signed and client contracts 101.
DISCLAIMER: This blog post is meant for informational purposes only and does not constitute specific legal advice or create an attorney-client relationship. Readers should discuss their specific situation and considerations with an attorney.
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