COMMERCIAL PRACTICE L4 - Drafting the commercial contract - BOILERPLATE CLAUSES Flashcards
What are boilerplate clauses? (3)
The general routine clauses dealing with the way in which the contract operates and they regulate, control and modify the rights and obligations of the parties - usually found towards the end of the agreement.
What happens if the boilerplate clause is ambiguous? (1)
It will be read contra proferentem (against the person seeking to rely upon it)
What does an entire agreement clause prevent? (1)
The party relying upon it from being liable for any statements or representations except as expressly set out in the contract.
What do entire agreement clauses provide? (2)
Commercial certainty for the parties and ensures all parties’ obligations are recorded in a set of identifiable contractual documents.
What does a notices clause provide? (3)
Where notice is to be served under the contract, the method of service and when the notice is deemed to be served.
What will most notices clauses not allow? (1)
Oral notice.
What does an assignment clause prevent? (2)
One or both parties from assigning the benefit of the agreement, or sub-contracting the work to a third party, without the consent of the other party to the contract.
What can be assigned and what cannot? (2)
The benefit of a contract (rights that a party has under contract) can be freely assigned but the burden can never be assigned.
What is required to transfer the burden? (2)
A ‘novation agreement’ between original parties and the new party.
What does The Contracts (Rights of Third Parties) Act 1999? (3)
It means that a person who is not a party to the contract may gain a statutory right to enforce the contract if: 1. The contract expressly provides that he may. 2. The term purports to confer a benefit.
What is the purpose of an exclusion of third-party rights? (1)
To prevent a third party from claiming rights under a particular term of the contract.
What is the aim of a severance clause? (2)
If any (part of a) clause in a contract is declared by the courts to be illegal, unenforceable, or invalid, it will be ‘severed’ from the contract at the discretion of the court.
What is the aim of a survival clause? (1)
It provides that certain clauses in a contract will continue to be binding on the parties even after the expiry of the contract.
