More boilerplate? Yes, please!
I was working my way through a contract recently and, like I always do, I scrolled to the last several pages. That’s right, the “boilerplate” is where I like to spend some of my time.
Why? Because if you get it wrong it can lead to big problems down the road.
Take the waiver provision for example. A waiver is when one party voluntarily gives up their rights as outlined in the contract. Simply put, to waive something means to not enforce it. The waiver clause in the boilerplate section of a contract talks about how a party can waive a right and what happens when the party waives the right.
To highlight how this clause might work, assume you’re a service provider. You have a contract with a client for ongoing monthly services and the contract says you’re entitled to a late fee if payment is not received by the 1st day of each month. The client pays on time for 6 months, but on the 7th month the client is 2 days late. You decide not to collect the late fee, because the relationship is otherwise great. By not enforcing the late fee, you have waived your right to collect it – on this occasion.
But what if you change your mind and want to enforce the late fee a few months later? And what does your failure to enforce this one time mean in the future if your client pays late again? What does it mean for your ability to enforce all the other terms of the contract? The answer depends on the waiver clause.
There are several different types of waiver clauses, and it’s important to know what type of waiver is in the contract to know what must be done to avoid losing your right to enforce the contract in the future.
I think of a contract as the story about an agreement between two parties. How the story turns out depends in large part on who is doing the writing.
Ignore the boilerplate at your peril.