Six Boilerplate Provisions to Double Check in Your Company’s Contracts

Most contracts aren’t exactly page-turners. It can be tempting to skim them or agree on the important parts rather than double-check every detail. In some cases, however, those small details can make a world of difference. Boilerplate provisions are general terms of a contract that normally appear at the end in a section titled General Terms or Miscellaneous. They may seem standardized, but what they dictate could end up being hugely important to your company.

Here are six boilerplate provisions that you should be double-checking in your company’s contracts, and what they really mean:

1. Notice clause. This clause explains how communication will happen between the two companies addressed in the contract. More importantly, it explains what justifies a notice. This clause could mean the difference between being notified about important changes or not.

2. Amendments clause. This clause states whether or not any changes can be made to the contract after it has been signed. If they can, it explains the legal method by which to go about making such changes.

3. Choice of Law clause. This clause defines which state’s laws will be upheld if the contract is broken. Some states have very different laws relating to broken contracts, so research this thoroughly. Worth noting, you can’t choose just any state. It must have some tangible connection to one of the companies.

4. Jurisdiction clause. This clause determines which specific state a lawsuit must be filed in if the contract is alleged to be broken. This clause also requires specific state law research. It is most relevant to contracts where the parties are located in separate states.

5. Confidentiality clause. This clause establishes to what extent the two companies are allowed to speak publicly about their work together. This clause may be most applicable to work on products about which the signing parties may not be allowed to speak before the products are officially revealed.

6. Force Majeure clause. This clause explains what happens to the contract if a major unforeseen event affects one of the signing parties, such as a natural disaster. Its name is translated from the French phrase for “superior power.”

It can be tempting to sign contracts without seeking out all of the fine print and understanding what it means. Not all boilerplate provisions are the same however, so it pays to pay attention. If you need help with contracts or other business litigation, contact Integrated General Counsel today. We help business owners put all the legal pieces together!

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