Conexus Law, the specialist advisory firm that provides legal and commercial advice to clients who work in sectors where the built environment, technology, engineering and people converge, is warning companies to check the boilerplate clauses on all existing and future contracts in the light of the impact of Covid-19. The firm is warning that failure to do so could be costly and disruptive.
Ian Timlin, at Conexus Law, explains:
“Boilerplate clauses, also known as standard, miscellaneous or general clauses, are generally found towards the end of most contracts or commercial agreements. They are normally standard commercial terms that do not vary much from one transaction to another. They often regulate the operation of the contract (ie. its duration, interpretation, transferability, and enforceability).
“Understandably when people are using an existing contract, for example a supplier agreement, they concentrate on the operative terms and conditions of the agreement and pay less attention to these standard provisions at the end of an agreement. However, many contract disputes depend on the drafting of boilerplate clauses such as termination, force majeure, and entire agreement clauses. This is particularly important during Covid-19 for organisations who are struggling to deliver a contractual service as a force majeure clause might allow for the suspension of performance as a result, for example, of quarantine or other employee restrictions.
“In addition, most boilerplate clauses clarify the relationship between the contracting parties. Generally, subject to statutory restrictions and illegality, the parties to an English law contract are free to define their contractual relationship between each other which can provide certainty if terms in the contract are ever disputed.
“This is especially important given the strain that Covid-19 has put on relationships throughout the supply chain, with many businesses now looking at their financial and logistical obligations to third parties to prepare and protect their operations and staff. Just re-hashing clauses and omitting properly thought out boilerplate clauses may create uncertainty and expose certain elements of the relationship or agreement between parties open to interpretation in a court of law, which is often an expensive and unpredictable exercise.
“Finally, it is worth checking these clauses for another reason. They may assist you in your commercial aspirations – you may be pleasantly surprised by what is hidden there!”