Paris Energy Series No. 8: Beware of the Boilerplate – The Risks of Standard-form Clauses in Common and Civil Law Jurisdictions

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1. Introduction -

When commercial agreements are negotiated, certain key terms are generally the subject of intense discussion. Once these terms have been agreed, there is a risk the ‘boilerplate’ provisions1 at the back of the contracts can receive scant scrutiny in the race to get the deal done. Yet far greater scrutiny will fall on these provisions when a dispute arises. Properly drafted, they can protect a party from liability or allow it to assert its rights. If neglected, they can prove the other side’s ‘get out of jail free’ card.

The risks attaching to these provisions differ in common and civil law jurisdictions. In common law jurisdictions, the principal problem is that parties do not properly consider what risks they are trying to avoid, and unquestioningly use time-honoured wording. The result is that the boilerplate provisions may not be drafted broadly enough to cover off the risks in question. This article selects several of these neglected provisions (entire agreement, severability and no waiver provisions), and explains their purpose and potential pitfalls awaiting the unwary, primarily focusing on English law. It then provides practical tips for avoiding these pitfalls.

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