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<< back to all ArticlesWhy Standard Terms Deserve Closer Attention
Boilerplate clauses often appear at the end of commercial contracts under headings like “General” or “Miscellaneous.” They can seem routine, but they determine where disputes are heard, which law applies, whether you can rely on discussions, and how easily you can amend or exit an agreement. Skimming this section can leave a business exposed to outcomes it never intended.
For Canadian companies, especially those operating across provinces or cross-border, reviewing the boilerplate clauses is now part of standard contract diligence, not a last-minute detail.
What Are Boilerplate Clauses?
Boilerplate clauses are recurring provisions found in most commercial agreements. They govern how the contract functions rather than the business deal itself (such as price or deliverables). Common clauses include:
- Governing law and jurisdiction
- Entire agreement
- Notices
- Assignment
- Waiver and severability
- Force majeure
- Counterparts and electronic signatures
- Amendments
Because they appear so often, these clauses are frequently treated as “standard.” However, small drafting differences can shift risk and shape how disputes unfold.
Standard Boilerplate Clauses and Why They Matter
Entire Agreement Clause
An entire agreement clause confirms that the written contract is complete and supersedes prior discussions or emails. If an important assurance is missing from the signed document, it may be hard to rely on it later. A common example is a supplier verbally committing to a specific implementation timeline that never appears in the contract. This clause can make enforcing that promise difficult. At the same time, it protects you if the other party later claims an unwritten “side deal.”
Governing Law and Jurisdiction
A governing law clause states which jurisdiction’s law applies; a jurisdiction clause dictates where disputes must be brought (for example, Alberta courts). An Alberta business generally prefers Alberta law and courts to avoid unfamiliar rules and higher costs.
If the contract designates another province or foreign venue, you may have to litigate far from home. In national or international operations, clear governing law and jurisdiction clauses reduce disputes over where they belong. Quebec’s civil law system also means contracts governed by Quebec law follow different principles than those under the common law in Alberta, British Columbia, or other provinces.
Notice provisions
Notice clauses specify how formal communications must be sent, to whom, and when they are deemed received. They control matters like termination, renewal, and default notices. Problems often arise where notice must be sent by registered mail to a set address. An email to your usual contact, even if read, may not count. Many businesses discover too late that a termination or renewal they thought was valid failed to meet a technical requirement. Well-drafted notice clauses minimize disputes about whether proper notice was given.
Assignment
An assignment clause governs whether a party can transfer rights or obligations, such as during a sale or internal reorganization. Standard wording often prohibits assignment without prior written consent. If you plan to sell your business, attract investors, or restructure, strict limits can complicate deals and require many approvals. Conversely, if you rely on a supplier’s specific expertise, tighter restrictions may be wise, so your contract isn’t assigned to an unknown third party without consent.
Waiver
A waiver clause prevents parties from unintentionally losing rights through delay or inaction. It generally requires any waiver to be in writing. For example, if you repeatedly allow late payments, the customer might argue that payment deadlines no longer apply. A proper waiver clause preserves your right to enforce terms later, though ignoring breaches too often can still weaken your position.
Severability
A severability clause ensures that if one provision is invalid or unenforceable, the rest of the contract remains valid. The goal is to prevent the entire agreement from failing because of a single defective term. Severability reduces the risk that a court will strike down the whole contract rather than only the offending clause.
Force Majeure
A force majeure clause addresses extraordinary events beyond the parties’ control, such as natural disasters, government actions, or supply chain disruptions, that prevent or delay performance. It defines covered events, suspended obligations, and notice and mitigation requirements.
Disputes often arise when clauses are outdated or narrowly drafted. If an unlisted event occurs, the parties may disagree on whether obligations are suspended or remain enforceable. For example, some businesses encountered this issue during the COVID-19 pandemic. Since then, including language that explicitly names pandemics has become standard. Reviewing the definition against your operations helps avoid uncertainty.
Counterparts and Electronic Signatures
Counterpart clauses allow a contract to be signed in separate copies; each considered an original. Electronic signature clauses confirm that digital or scanned signatures are valid. These provisions support efficient execution when parties are in different locations. Some documents, however, still have formal requirements under provincial law, so confirm that electronic signing is acceptable for your agreement.
Amendments
Standard amendment clauses require that changes be in writing and signed by both parties, preventing disputes over verbal or informal modifications. For businesses, this ensures that material changes, pricing, service levels, or scope are documented properly. Where frequent informal adjustments occur with long-standing partners, be mindful that these changes may not be enforceable if the amendment clause is not followed.
Conclusion
The issue is rarely the presence of a boilerplate clause, but rather, how often it goes unreviewed. When reviewing or negotiating commercial contracts, consider the following:
- Do governing law and jurisdiction align with where you can realistically manage a dispute?
- Are key assumptions captured in the written contract, given the effect of the entire agreement clause?
- Do notice provisions work in practice and reflect current contact details and communication methods?
- Do assignment and amendment clauses allow for expected growth, financing, or restructuring without unnecessary barriers?
- Are waiver, severability, force majeure, and execution provisions current and consistent with how your business operates?
During a dispute, Canadian courts begin with the words the parties used. Ensuring the boilerplate reflects your intentions is as important as negotiating the commercial terms themselves.
Boilerplate clauses may seem routine, but they shape where and how disputes are resolved, who bears certain risks, and how much flexibility you have to change or exit an agreement. For significant contracts, consider having a lawyer review the boilerplate and the commercial terms before you sign. A brief review at the outset can help ensure that “standard” clauses do not lead to unexpected surprises later on.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.
