COMPARATIVE CONTRACT LAW
PART III:
BOILERPLATE CLAUSES
LLM - Comparative Law Course 522
Dr Myra Williamson
KiLAW
Spring Semester 2013
Overview
• So far, we’ve looked at the general law of contract in the common
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law
We’ve tried to learn more about what constitutes a contract
specifically in the UK
We’ve also learnt about performance, breach and remedies
We’ve been learning about the general rules and principles for
contract law
Now we will look at one particular issue in contract law
We could choose any number of issues but we’re going to look at
a common issue related to drafting commercial contracts: the
effects of ‘boilerplate clauses’
This topic includes both theory and practice: the theory of
contract law and the day-to-day practices of commercial lawyers
Why this issue? Why now?
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All countries use contracts for commercial purposes
Because of the principle of “freedom of contract” the parties want to
set out all the terms that they have agreed to
Many parties use a common law style of drafting (with long contracts
& many standard clauses) using the English language but they
subject the contracts to the laws of civil law legal systems
This issue should be relevant to Kuwait’s commercial environment,
as well as neighbouring countries, which probably also draft their
commercial contracts in English (what is your experience here?)
It provides an interesting crossover between theory and practice
It throws up some interesting problems for comparative law
It provides an opportunity for a common law v civil law legal system
comparison as well as comparison within civil law legal systems
This topic comes at the end of our ‘comparative contract law’ unit drawing together some things we already know about
Objectives
• To learn what ‘boilerplate clauses’ are
• To consider how and why they are used in contracts
• To consider how common law and civil law legal
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systems interact in the interpretation of boilerplate
clauses
To take a few examples and examine how a civil law
country will apply a common law-type contract
To use comparative law method and apply it to the
practice of international commercial contracts
To combine theory and practice in comparative law
To learn about a research project in this area
undertaken by the University of Oslo – we’ll look briefly
at some of the problems they considered
Reading
• Ewan McKendrick Contract Law – Text, Cases and Materials
3rd ed (Oxford University Press, 2008) Chapter 12
“Boilerplate Clauses”
• Giuditta Cordero-Moss (ed) Boilerplate Clauses, International
Commercial Contracs and the Applicable Law (Cambridge
University Press, 2011)
• Clifford Chance “Boilerplate Clauses in English Law
Contracts”
http://www.cliffordchance.com/publicationviews/publications/2
012/09/boilerplate_clausesinenglishlawcontracts.html
• List of some typical boilerplate clauses: Contracts and
Agreements http://www.contractsandagreements.co.uk/whatare-boilerplate-clauses.html
Definition: what are boilerplate clauses?
• Standardised terms in contracts that are usually the same
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in all contracts
These clauses are sometimes negotiated but are often
included without much discussion
They are often towards the end of the contract
They are often not even read – or read closely
They aim at covering all possible eventualities
Their objective is to render the contract self-sufficient –
the rationale is that the contract should define the
relationship between the parties in all areas
Another way of putting it: their objective is to exclude the
operation of the law by writing down all the terms that will
affect the relationship between the parties
Boilerplate? What does the word mean?
• The word “boilerplate” refers to any text that can be used
in new situations without much change from the original
• “Boilerplate” originally referred to the metal, maker’s label
attached to steam boilers:
• http://www.virtualmuseum.ca/Exhibitions/Railway/en/ag2.php?id=49&pn=4
Where and why are they used?
• Originally, the idea of drafting a lengthy contract with
many standard clauses came from the common law
• At common law, the parties are entitled to define their
contractual relationship as they wish (‘freedom of
contract’) so they would logically want to cover all
possibilities
• However, this common law practice has spread - it’s now
adopted in most international contracts, even when they
are not subject to a law belonging to the common law
family
• It is now quite normal for civil law contracts to be
drafted in a common law style with extensive
boilerplate clauses
Common boilerplate clauses
• General clause
• Retention of title clause
• Price escalation clause
• Interest
• Force majeure
• Choice of law
• Arbitration
• Jurisdiction
(this list is taken from Schmitthoff, as cited in McKendrick at
p400 – it’s in the reading I handed out)
University of Oslo’s list of boilerplate
clauses
• Entire agreement
• No Waiver
• No oral amendments
• Severability
• Conditions/essential terms
• Sole remedy
• Subject to contract
• Material adverse change
• Liquidated damages
• Indemnity
• Representations and warranties
• Hardship
• Force majeure
Comparative law problems
• A common law drafting style creates a contract that might
be subject to the laws of a civil law country
• Common law and civil law systems present various
differences regarding interpretation of contracts
• Which should prevail?
“When an international contract governed by a civil law
system is written in the common law style, a tension may
arise between the different legal traditions”
• Giuditta Cordero-Moss (ed) Boilerplate Clauses, International
Commercial Contracs and the Applicable Law at 2
University of Oslo research project
• See this link
http://www.jus.uio.no/ifp/english/research/projects/anglo/index.
html for a quick summary
• See this link
http://folk.uio.no/giudittm/AngloAmerican%20Contract%20Mod
els.pdf for a more detailed summary
• A research project that ran for 4 years at the University of Oslo,
one of Northern Europe’s most prestigious universities
• The research project was called:
“Anglo-American Contract Models and Norweigan or other
Civilian Governing Law”
• The researchers wanted to see what happens when an
essentially common law contract is interpreted by civil law
courts
• A book was published as a result of the research undertaken
(see me for a copy or extracts)
The Project
• In short, a group of (mainly) Norweigan legal researchers
wanted to learn more about why civil law legal systems
(including Norway, Germany, Italy, France, Denmark, Finland,
Sweden, Hungary, Russia) draft commercial contracts in
English, using an English-style of drafting and what happens
when those English-styled boilerplate clauses are subjected to
civil law courts - how are the clauses interpreted
• The project was led by Giuletta Cordero-Moss
• There were 3 parts to the project
• Click here and go to p17 to read about what they were
interested in:
http://folk.uio.no/giudittm/AngloAmerican%20Contract%20Mod
els.pdf
Some conclusions of the University of
Oslo project
• There is a gap between the way in which international
contracts are written and the way in which they are
interpreted and enforced
• Considering contracts to be self-sufficient and not
influenced by any national law (as if they enjoyed a
uniform interpretation thanks to their own language) is
illusory because governing laws may contain mandatory
rules that may not be derogated from by contract
Conclusion
• Boilerplate clauses are an interesting example of how civil
and common law systems overlap and interact
• They are an interesting example of how the theory and
practice of contract law interact
• What is your experience in Kuwait:
• Are commercial contracts drafted in English?
• Are commercial contracts here relying on boilerplate
clauses?
• Can you see any potential problems in interpreting the
clauses in Kuwait if written in an English common law
style?
• Do you know of any cases or studies in this area?