4. Interpretation Provisions
In many jurisdictions, local law provides that ambiguities in drafting are construed against the drafting party.
Interpretation provisions serve to circumvent this Common-Law rule by providing a representation that the agreement was jointly drafted by the parties.
5. Modification and Waiver Provisions
These provisions allow the parties, without the need to exchange new consideration, the authority to modify an agreement so long as both parties agree in writing.
Waiver provisions provide that a party’s waiver of a breach of terms shall not serve as a waiver of any subsequent breaches. An example of this circumstance would be if a party were to waive the second party’s due date for payment by affording it an additional period to cure.
A waiver provision would provide that such waiver of what otherwise would have been the breach of a payment term would not constitute a waiver of a subsequent breach of that term.
6. Counterparts Provisions
Traditionally, the parties engaged in a contract closing at which the agreement was signed by all the parties at one time.
But, in recent years, where it is often the case that parties are not in physical proximity to one another, drafters have inserted provisions allowing the parties to execute the agreement in separate parts.
Sometimes added to these provisions is the option to allow the parties to exchange signature pages by facsimile, PDF, or by electronic signature, the critical phraseology being that such reproductions shall be considered to be as valid as original signatures for all purposes.
The Take Away:
Boiler plate provisions are ordinarily not the subject of negotiation and so are not, generally, uppermost in the consciousness of parties desiring to complete a transaction.
But, these provisions should not be ignored and, under certain circumstances, may need to be modified to address special types of risks associated with the business relationship.
The contract series:
About the author
Robert Ian Goodman, Esq. represents clients worldwide in the areas of complex commercial immigration and international and domestic commercial law. Mr. Goodman also provides general counsel services to entrepreneurs and start-up businesses and counsels foreign businesses interested in establishing a presence in the U.S. marketplace and U.S. businesses interested in expanding abroad. Mr. Goodman is principal of Goodman Immigration. He is also Special Counsel to the international boutique law firm, Sharma & DeYoung LLP ("S&D"), where he directs the firm's commercial immigration practice. He also co-chairs that firm's Technology and Emerging Companies Practice Group and is a member of S&D's Commercial Litigation and Arbitration Practice Group.Website