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Introduction 17 May 2016 Learn With Us: Boilerplate clauses Jenny Mee, Partner, K&L Gates © Copyright 2016 by K&L Gates. All rights reserved. INTRODUCTION This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 1 WHAT IS A “BOILERPLATE” CLAUSE? Boilerplate is any text that is or can be reused in new contexts or applications without being greatly changed from the original (Wikipedia) In contract law, the term "boilerplate language" describes the parts of a contract that are considered standard (Wikipedia) klgates.com 3 ETYMOLOGY ° Wikipedia: ° "Boiler plate" originally referred to the sheet steel used to make boilers ° The analogy between the curved steel used to make water boilers and curved metal used to print prepared text was based on: ° the curved shape of the plate; and ° the fact that it had been prepared elsewhere before being incorporated into a downstream producer’s finished product ° In the field of printing, the term dates back to the early 1900s klgates.com 4 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 2 EXAMPLES OF BOILERPLATE CLAUSES ° “General” clause at the back, covering (eg): ° Governing law and jurisdiction ° Notices ° Entire agreement ° Further assurances ° No waiver ° Severability ° Contra proferentum (no adverse interpretation) ° Standard definitions and interpretation provisions ° Other standard clauses ° eg force majeure, termination, insurance, etc klgates.com 5 AGENDA FOR THIS SESSION ° Entire agreement clauses ° Set-off clauses ° No waiver clauses klgates.com 6 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 3 DISCUSSION ° Why aren’t they in every contract? ° Why aren’t they common law rules? klgates.com 7 GOALS FOR THIS SESSION ° Understand: ° the purpose of each clause ° common wordings (and differences) ° the law behind each topic ° the extent of, and limits on, their enforceability ° examples and results from case law klgates.com 8 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 4 ENTIRE AGREEMENT CLAUSES CLAUSES “This Agreement contains the entire understanding between the parties concerning the subject matter of the Agreement and supersedes, terminates and replaces all prior agreements and communications between the parties.” “This agreement states all the express terms of the agreement between the parties in respect of its subject matter. It supersedes all prior discussions, negotiations, understandings and agreements in respect of its subject matter.” klgates.com 10 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 5 PURPOSE OF CLAUSE ° Inntrepreneur Pub Co. v East Crown Ltd (2000 English case) “… to preclude a party to a written agreement threshing the undergrowth and finding in the course of negotiations some (chance) remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim” klgates.com 11 klgates.com 12 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 6 IS THE CLAUSE ATTEMPTING TO COVER … ° Express terms? ° Implied terms? ° Prior agreements? ° Pre-contractual representations? klgates.com 13 ENTIRE AGREEMENT CLAUSES: EXPRESS TERMS This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 7 IS THE CLAUSE ATTEMPTING TO COVER … ° Express terms? ° Implied terms? ° Prior agreements? ° Collateral contracts? ° Pre-contractual representations? klgates.com 15 EXPRESS TERMS ° Exclude other express terms – main purpose of clause ° What if the contract does not contain an entire agreement clause? ° To what extent will the clause change the legal position? klgates.com 16 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 8 EXPRESS TERMS – NO ENTIRE AGREEMENT CLAUSE ° Parol evidence rule ° not just verbal klgates.com 17 PAROL EVIDENCE RULE ° Gordon v McGregor (1909, High Court) ° adopted and approved 19 th century English formulation: “… where parties agree to embody, and do actually embody, their contract on a formal written deed, then in determining what the contract really was and really meant , a court must look to the formal deed and to that deed alone.” klgates.com 18 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 9 PAROL EVIDENCE RULE ° Codelfa Construction Pty Ltd v State Rail Authority (1982, High Court) “The broad purpose of the parol evidence rule is to exclude extrinsic evidence (except as to surrounding circumstances), including direct statements of intention (except in cases of latent ambiguity) and antecedent negotiations, to subtract from, add to, vary or contradict the language of a written instrument.” klgates.com 19 PAROL EVIDENCE RULE ° “What the contract really was” vs “what the contract really meant” ° Parol evidence rule: ° Excludes extrinsic evidence in determining the meaning of words used in the written contract ° Sometimes (but not always) interpreted to exclude evidence of the existence of other terms klgates.com 20 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 10 PAROL EVIDENCE RULE ° State Rail Authority of New South Wales v Heath Outdoor Pty Ltd (1986, NSW Supreme Court) “[Under the parol evidence rule,] parol evidence is not admissible to contradict or vary the terms of a written agreement. But it is a rule whose scope and rationale is often misunderstood. It has no operation until it is first determined that the terms of the agreement are wholly contained in writing …” klgates.com 21 PAROL EVIDENCE RULE ° Codelfa Construction Pty Ltd v State Rail Authority (1982, High Court) “It is not without significance that the parol evidence rule has never been applied so as to exclude evidence of a condition, non-fulfilment of which goes to the existence or validity of the contract.” klgates.com 22 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 11 klgates.com 23 PAROL EVIDENCE RULE ° Hope v RCA Photophone of Australia Pty Ltd (1937, High Court) “When parties express their agreement in writing they do so for the purpose of securing certainty and preventing disputes. They may choose to leave their arrangements to the risks and chances of verbal evidence. But if they have recourse to writing for the purpose of recording their agreement , they cannot afterwards change their attitude and, by seeking to give parol evidence, introduce the very element of uncertainty which the adoption of writing was intended by both parties to exclude … It is true that there are exceptional cases where the parties to a contract have not expressed all the terms of their contract in writing and, accordingly, parol evidence is admitted to complete the written contract ”. klgates.com 24 This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances 5/17/2016 without first consulting a lawyer. ©2016 K&L Gates LLP. All Rights Reserved. 12 EFFECT OF ENTIRE AGREEMENT CLAUSE ° Hope v RCA Photophone of Australia Pty Ltd (cont) “In the present case, however, the parties have made an agreement in express terms which prevents either of them supplementing the written terms. Clause
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