Clients frequently ask me for “standard”, “normal” or” boilerplate” legal documents. This includes contracts, employee handbooks, non-competition agreements, and even legal pleadings. The truth is, very little is truly standard. Outside of a few narrow regulations, if a document needs to be drafted, it’s (almost) all negotiable. Even truly standard contracts, like the Minnesota Realtors form contract, can be easily modified and regularly evolves. I have seen a revision significantly and unexpectedly altered a party’s rights to be different from what a realtor expected. In other words, even “standard boilerplate” can cause unexpected results.
“Boilerplate” technically just means language in a particular form used repeatedly. However, it is often used to denote language that can be skimmed or ignored. “This is just boilerplate.” My favorite example of the term in context from dictionary.com’s entry for “boilerplate” is: “The buyer foolishly ignored the boilerplate at the end of the legal agreement.”
Several facts about boilerplate language are underappreciated. First, very few documents are truly standard. The Minnesota Association of Realtors form is extremely common in Minnesota, but it is not the only form. Other forms differ in significant and substantial ways. I have access to many “standard” forms of various types, some in-house and some prepared by statewide committees of professional organizations. Usually multiple, very different, “standard” forms and templates. The secret to a good template or form is that it usually contains numerous clauses with careful notes on variations and a discussion of who that clause serves. Language we often see in the annotations is “lessors/employers will prefer language X, because it does this, lessees/employees will prefer language Y, because it does that. The author does not tell you which clause to use, because the author knows that it’s negotiable.
Second, even the most standard and seemingly harmless “boilerplate” language in a contract is there for a reason. Someone looked at the contract and said “if a someone else looked at this contract without this clause, they might think the parties expected or intended something different. In other words, someone decided “if this clause is not in here, the result will be different.”
Third, almost everyone’s boilerplate is different. Sometimes it is different for lopsided reasons. Most form or standard contracts are drafted to be favorable to the drafter or the drafter’s typical client. They serve or benefit a specific party. Other times, they may not be designed to benefit one side over the other intentionally, but they are just one of many possible solutions, and may be tailored to what the draft er thinks are “typical facts” that may very well not apply to your circumstances. They are rarely right for everyone, and frequently vary widely across and industry or from business to business even in the same City.
Fourth, even truly standard clauses can, and sometimes should, be changed. For example, one of the most common and non-controversial clauses is an integration clause. An integration clause is some variation of “this is the entire agreement between the parties.” This exists to ensure that no one comes back and says they only signed this contract because of a separate promise or understanding. But sometimes there is a separate promise or understanding, or years of standard practices between the parties.
Fifth, while a bit redundant, it bears repeating often. Every state in the United States has very different laws about most things. Some areas of law are entirely determined by individual states, like Community Property versus non-Community property rules, or the enforceability of non-competition agreements, or even remedies for certain breaches of contract.
As a result, when reviewing or drafting or reviewing a document, even one from a well-worn form, the question I ask is not, “Which of these provisions merit consideration for possible changes?” The question is, “Which of these hundred decisions I am making do I think the client wants or needs to be consulted on?” Typically, the client looks to their attorney to not only explain and advise, but also to make life easier by letting the client focus on the big decisions, while the attorneys use their discretion to help achieve the client’s goals. Of course, every client is different.
In the age of ready online forms, failing to appreciate these facts can have significant consequences. At the extreme, the form may contain clauses that are illegal in your state and render the whole document unenforceable. More typically, it is built based on one specific transaction by one specific party, perhaps pulled from an SEC filing. If you’re the lessee, and the form lease was originally drafted by counsel for a powerful lessor in a transaction with a lessee with no negotiating power, you do not want to use that form. Conversely you could probably find a form where the power was reversed, and almost every single clause was different.
More prosaically, treating forms as standard when they are not creates missed opportunities. I have seen forms that contain clauses that benefit neither party. If you assume it is a “standard agreement” you might just accept it and move on. But if you realize the other person may have just pulled a form or picked one of several equally acceptable options, you quickly realize that it may take very little of your negotiating leverage to make a simple change that significantly reduces your liability risk or greatly enhances your potential rewards.
As an aside, most lawyers I know don’t dislike online form websites because the cost us business. A single lawsuit caused by a poorly drafted form can result in a hundred times more fees. The problem is that the attorneys I know care about their clients, and it’s frustrating how often a potential client calls and our first thought is “if you’d called me before you signed, I could have saved you $50,000 with 10 minutes of my time.” It may take a few hours to revise a simple contract, employee handbook or employment policy and a few dozen to negotiate and draft a comprehensive and complex document, but it can take a few hundred to litigate a problem created by even a simple bad form.
Thomas Witt is an attorney with Fryberger, Buchanan, Smith & Frederick, P.A., practicing in the areas of Employment Law, Family Law and Civil Litigation. This article is not intended to provide legal advice. You should always consult with an attorney about your specific circumstances.
