It seems like most agreements could be as short as a few sentences or a paragraph, but contracts are never that short.
Why can’t contracts be simple one page documents?
Business lawyers know this question very well.
While the desire for a short contract makes a lot of sense, it is difficult to adequately protect the interests of the client within such a short framework. One of the primary reasons for the length of contracts is the boilerplate language that is often found at the end of contracts.
Some might call boilerplate “the fine print” at the end of a contract, although it is typically written in the same size and style of text as the rest of the document.
Boilerplate language is frequently very similar in appearance among different contracts, and can be boring to read because the language appears to have little or no relation to the actual terms of the deal for which the contract was drafted.
It is often in the boilerplate, however, that some of the most influential language in the agreement is located.
Imagine that you purchased a house, the seller was from Arizona and you the buyer are in Napa. After you buy the house and move in, you discover that the house has dry rot in the roof.
You believe the seller knew of the dry rot and didn’t disclose it to you, so you want to sue the seller for costs of repair, which are $20,000.
The boilerplate language will dictate many important issues of this dispute. Boilerplate language is not mandatory, but there are typical provisions that you will frequently find.
A “mediation” provision might require mediation before lawsuit, so your options for recovery could be limited.
A “choice of laws” provision will dictate which state’s laws will apply to the interpretation of the contract. If this choice of laws provision was in favor of the seller of your property, you might have to apply Arizona law to your dispute, which could be a challenge.
There might also be a “venue” provision that determines where the suit must be conducted. The venue might require your lawsuit to be filed in San Francisco or Phoenix or anywhere else, which could obstruct your ability to readily conduct a lawsuit from here in Napa.
You will hope that there is an “attorneys’ fees” provision which awards the costs of attorneys’ fees to the winner in your lawsuit, because the cost of attorney’s fees in a dispute like this could quickly exceed the costs of the repair that were the basis of the problem in the first place.
These are only a few of the most common boilerplate provisions, and each of them can have a substantial impact on your options if a dispute surrounding the contract arises.
The next time you see a one-page contract, consider whether it really should have more substance to give you the protection you expect.
Alex Myers is a business attorney with Myers & Associates in Napa. Reach him at firstname.lastname@example.org or 707-257-1185. The information provided in this column is not intended as legal advice, nor does it create an attorney-client relationship. The information is not a comprehensive analysis of the law — if you need legal advice, contact an attorney.
This column originally ran in the Napa Valley Register on February 28th, 2017. You can read it on the Register's website here:"What makes contracts so long?"