This article is Part VIII of the Musings on Contracts series by Glenn D. West, which explores the unique contract law issues the author has been contemplating, some focused on the specifics of M&A practice, and some just random.
Contractual boilerplate is much maligned. Every contract has it, but it is considered the “standard stuff” at the back that is rarely relevant to the “substantive” provisions at the front. The problem with that view is that a boilerplate provision contained in a contract between sophisticated parties is not, generally, any less enforceable than any other provision.[1] And the boilerplate provisions given short shrift in the negotiation or drafting of a contract could undermine other provisions of that contract.
Unconsidered or outdated boilerplate may contain landmines that could wreak havoc on your contract’s other “substantive” provisions. But these landmines exist primarily because of thinking about boilerplate as if it were somehow not a substantive part of the contract. The fact “is that ‘boilerplate’ is a misnomer as applied to these provisions and that lying in wait within each of them are significant business and legal issues.”[2] Just because “these provisions . . . have been in the firm’s precedents for ages, garnering ever more hallowed status,” does not mean that they are exempt from the same “critical analysis” that has been brought to bear on what are perceived to be the more substantive parts of the contract.[3] Indeed, these provisions may have been “drafted by geniuses, but those geniuses may have been wearing powdered wigs.”[4]
While contractual boilerplate is routinely relegated to the “Miscellaneous” section at the very back of a contract, the subjects covered include matters that could be outcome-determinative if there is a subsequent dispute regarding other contract terms. Those subjects include, among others: what law will govern any dispute (and whether that chosen law includes the chosen law’s statute of limitations and applicable tort law),[5] in what forum any dispute must be adjudicated (and whether those claims requiring adjudication will include related tort claims or just the contractual ones),[6] whether third parties have any enforceable rights under the contract,[7] whether the contract is assignable,[8] how certain words and phrases are to be interpreted, whether actions by a party may constitute a waiver of its substantive rights under the contract, and how and where notices are to be delivered. In reviewing contractual boilerplate after a dispute arises, one can be either mining for gold or uncovering landmines depending on the extent of the contractual hygiene[9] practiced when the contract was first negotiated. In other words, one could find either peril or delight in a subsequent review of these provisions once a dispute arises.
The Peril Side of Contractual Boilerplate
The typical survival provision provides that the right to indemnification terminates with respect to any indemnifiable claim for which the indemnifying party has not received notice before the end of the specified survival period.[10] While there are frequent disputes over whether the notice of claim was valid when the claim was for losses not yet incurred or the notice failed to provide sufficient detail of the claim,[11] it is rare that there is a dispute over whether the notice was timely. Just ensure the indemnifying party receives your notice before the end of the survival period. Right?
In a recent Delaware Superior Court decision, Mosaic Capital Partners v. Local Bounti Operating Co.,[12] Judge Paul R. Wallace had to consider whether a notice received by the indemnifying party after “normal business hours” on the last day of the specified survival period was timely and preserved the indemnification claim. The survival provision was set forth in Article VIII of the Purchase Agreement. Section 8.01(a) provided that:
Except as set forth below in this Section 8.01, the representations and warranties of the Sellers, the Target, Parent and Purchaser contained in this Agreement or in any certificates or documents delivered hereunder shall survive for a period of time ending at 11:59 p.m. Eastern Time, on that date which is twelve (12) months after the Closing Date.[13]
Section 8.05(a) of the Purchase Agreement further provided that:
No Seller Indemnifying Party shall be liable for any claim for indemnification under this Article VIII unless written notice of a claim for indemnification is delivered by the Purchaser Indemnified Party seeking indemnification to the Seller Indemnifying Party from whom indemnification is sought prior to the expiration of any applicable survival period set forth in Section 8.01 (in which event the claim shall survive until finally and fully resolved).[14]
The buyer sent a claim notice to the seller by email “at 10:04 p.m. EST” on April 4, 2023 (the twelve-month anniversary of the Closing Date). But the seller claimed that the notice was untimely (having been received by the seller on April 5, not April 4). Why? Well, buried in the boilerplate at the end of the Purchase Agreement was a notice provision, Section 11.03. That Section read as follows:
Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11.03).[15]
Because the survival period did not end until 11:59 p.m. EST on April 4, 2023, the buyer argued that applying the “normal business hours” requirement (particularly if that meant 9 a.m. to 5 p.m. as it has been historically understood) would effectively mean that the survival period was shortened by almost seven hours.
Because this was a Motion for Judgment on the Pleadings by the seller, the seller was required to demonstrate that its interpretation of the Purchase Agreement was “the only reasonable one because the agreement is unambiguous.”[16] Judge Wallace, however, determined that the Purchase Agreement (with the potential conflict between the survival clause and the boilerplate notice provision) was ambiguous. While “[s]pecific language in a contract controls over general language, and where specific and general provisions conflict, the specific provision ordinarily qualifies the meaning of the general one,”[17] Judge Wallace did not believe that he could determine whether Section 8.01 (a) or Section 11.03 was the specific provision governing the required notice of indemnification before the end of the survival period. After all, while the survival clause was explicit in tying the end of the survival period to 11:59 PM EST on April 4, 2023, unless written notice of an indemnification claim was received by the sellers prior to such time, the survival clause did not specify how any such notice was to be given; only the notice clause provided that specificity.
But there was another reason that Judge Wallace was hesitant to rule on the case without further evidence: he was not certain that giving timely notice in the manner prescribed by Section 11.03 was even a condition to the continued survival of the indemnity provision. Why? Because he viewed Section 11.03 as simply a “procedural” notice requirement and “the Court shouldn’t read any agreement in a way that permits a procedural provision to limit a substantive right, unless such . . . intention to do so is explicitly stated in the agreement.”[18] In other words, failure to give notice before 11:59 PM EST on April 4, 2023, may well have limited a substantive right because Section 8.05(a) said as much, but failure to give that notice until after the end of “normal business hours” may not have done so because Section 11.03 did “not clearly state it applies to indemnity notices.”[19]
Judge Wallace found potential support for viewing the requirements of Section 11.03 as simply “procedural” and not limiting the substantive rights in Article VIII by looking at yet another boilerplate provision—Section 11.10.[20] Section 11.10 of the Purchase Agreement, titled “Amendment and Modification; Waiver,” contained the following language: “No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof.”[21] So, did it matter whether the notice was timely, at least pursuant to the required notice procedures in Section 11.03? Hmm.
Finally, to the extent compliance with notice during “normal business hours” pursuant to Section 11.03 was operative as a condition to the seller’s indemnification obligations under Article VIII, Judge Wallace also noted that he needed evidence of what exactly were “normal business hours” of the seller/recipient of the notice, Mosaic Capital Partners, a lower-middle-market private equity firm. Are their “normal business hours” really 9 a.m. to 5 p.m.? What are most private equity firms’ “normal business hours?”
Interestingly, although not cited by Judge Wallace in Mosaic, a similar issue arose in Fesnak and Associates, LLP v. U.S. Bank National Ass’n.[22] There, the U.S. District Court for the District of Delaware reacted the same way Judge Wallace did to a seeming conflict between a survival clause ending at 11:59 PM EST on June 9, 2010, a notice provision requiring notice by fax to be given during “normal business hours,” and a fax indemnity notice that was sent at 10:21 PM EST on June 9, 2010—the court decided it needed more evidence before ruling.
Is a reference to “normal business hours” something that should even be in a notice provision today, particularly given that the most likely notice it would apply to post-closing was the indemnification claim notice? Is a reference to “normal business hours” old-school and no longer workable? Obviously, this simple strike-through in the boilerplate notice provision would have presumably eliminated this dispute: “if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient.” And, by the way, did we ever think the standard no waiver clause (particularly the “no delay” language) would apply to a potential failure to provide timely notice of indemnification? Should we consider modifying or eliminating that language in M&A deals? Read on.
The Delight Side of Contractual Boilerplate
I have told a version of this story before,[23] but it’s the best illustration I know of the “outcome-determinative” delights that can be found in contractual boilerplate. There was once a public company that, as part of the audit of its financial statements, was informed that its accounting firm might need to issue a “going concern” qualification based upon the accounting firm’s review of the company’s public debt indenture. Apparently, the company had engaged in a transaction during the prior year that appeared to have violated one of the indenture’s negative covenants, and the accounting firm was seeking confirmation from the company’s counsel that the indenture had not been violated. The company’s counsel, however, was unable to provide that assurance.
Given the seriousness of the issue and the fact that a private equity firm controlled the company, we were called for a second opinion. Reviewing the negative covenant, it was clear that the transaction would likely have violated the otherwise broad prohibition without an applicable exception. However, an exception permitted transactions otherwise prohibited by the negative covenant to the extent permitted by the “Credit Agreement.” “Credit Agreement” was defined elsewhere in the indenture to be that certain Credit Agreement, dated as of a specific date, and entered into with a named bank, “as the same may be amended, modified, or replaced from time to time.”
While nothing in the original credit agreement would have permitted the transaction in question, it turned out that the original credit agreement had been amended to allow the transaction during the prior year. Someone at the company had been alerted to the need to amend the original credit agreement but hadn’t necessarily considered the impact on the indenture. It appeared clear, therefore, that the transaction was permitted under the indenture because it allowed any transaction permitted by the “Credit Agreement,” which was defined to include any amendments thereto. Somehow, the current company counsel overlooked this fact. However, we had an advantage because, in the early days of private equity, we insisted on these “as amended” definitions to provide flexibility for our private equity clients and their portfolio companies in agreements that were more difficult to amend (like an indenture). So we were alert to look for them.
While the “amended, modified or replaced from time to time” language may not have technically been boilerplate in this particular indenture (and instead was part of an operative definition), there are, in fact, many contracts, including purchase and sale agreements, that routinely include boilerplate provisions with a similar effect. Indeed, the Purchase Agreement at issue in Mosaic contained the following provision in Section 11.04:
Unless the context otherwise requires, references herein: . . . (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof.[24]
In a different dispute, this might be a delightful find or one contributing to peril. And again, it’s a fairly standard provision.[25] Is the flexibility it provides going to help or hurt? You have to decide whether you want to include it or not. One thing is for sure: you cannot ignore it simply because it’s considered “boilerplate.”
Could this “boilerplate provision” allow the seller to argue that a disclosed contract, which had been amended before entering into the Purchase and Sale Agreement but which amendment had been overlooked in compiling the disclosure schedules, had been disclosed in its “as amended” state? Presumably, any ability to rely on this clause to allow the seller to enter into amendments post-signing and pre-closing and have them deemed disclosed as of signing would be precluded by the pre-closing covenants. But, from a buyer’s perspective, what potential benefit could be derived from having this as part of the boilerplate? And what legitimate argument does the seller have to include this clause? While the clause may be helpful in other contexts, is it something better left out or at least modified to be clear it would not allow a nondisclosed amendment to have been deemed disclosed?
Concluding Thoughts on the Perils and Delights of Contractual Boilerplate
There are likely more perils than delights to be found in contractual boilerplate. And that would be more proof that transactional lawyering is not for the “faint of heart,”[26] or, as Ken Adams prefers, “not for the faint-hearted.”[27] So we have no choice but “to think clearly and act bravely.”[28]
The truth is we need to regularly review our contractual boilerplate to ensure nothing lurking there could undermine other provisions of the agreement. And in reviewing that boilerplate, we must ensure that we are knowledgeable about some of the nuances associated with boilerplate (particularly the “encrusted” variety). As suggested in a recent law review article:
Lawyers need to [know] what boilerplate clauses were originally intended to accomplish and how they have been interpreted; they need to know what words make a difference in forum selection and governing law provisions to actually accomplish their objectives; they need to understand what a standard no-third-party beneficiary cause does and what exceptions should be built in to avoid causing more harm than good; they need to appreciate the nuances of liquidated damages provisions; they need to understand why and how no reliance clauses work to eliminate potential extra-contractual fraud claims in many states; they need to understand how courts have interpreted the supposed hierarchy of “efforts” clauses; they need to be able to confidently review an anti-assignment or change of control clause and advise on whether the contemplated deal needs consent based upon applicable caselaw; they need to understand the courts’ interpretation of standard material adverse change clauses; and yes, they need to know what each type of damage or loss included in a typical excluded loss provision might actually mean.[29]
Because you may not have learned this stuff in law school,[30] you need to ensure your in-house CLE programs are covering it; and, if you are not a member of the Jurisprudence Subcommittee of the ABA Business Law Section’s M&A Committee, where we regularly do that sort of thing based on a review of recent caselaw, you should be.
See Rissman v. Rissman, 213 F.3d 381, 385 (7th Cir. 2000) (“[T]he fact that language has been used before does not make it less binding when used again. Phrases become boilerplate when many parties find that the language serves their ends. That’s a reason to enforce the promises, not to disregard them.”); see also Silva v. Encyclopedia Britannica Inc., 239 F.3d 385, 389 (1st Cir. 2001) (“[T]hat the forum-selection clause is a ‘boilerplate’ provision does not ipso facto render it invalid. ‘It is not the law that one must bargain for each and every written term of a contract.’” (citations omitted)). ↑
Tina L. Stark, Negotiating and Drafting Contract Boilerplate §1.01, at 5 (ALM Publ’g 2003). ↑
Id. §1.02, at 6. ↑
Howard Darmstadter, Does the Pony Express Still Stop Here?, Bus. L. Today, Sept./Oct. 1998, at 16–17. ↑
See John F. Coyle, The Canons of Construction for Choice-of-Law Clauses, 92 Wash. L. Rev. 631 (2017); see also Glenn D. West, There Is More to a Choice-of-Law Clause Than Filling in the Name of the Selected State, Weil’s Glob. Priv. Equity Watch (June 30, 2021). ↑
See John F. Coyle, Interpreting Forum Selection Clauses, 104 Iowa L. Rev. 1791 (2019); see also Glenn D. West, Special Order Your Forum Selection Clause, Weil’s Glob. Priv. Equity Watch (Oct. 28, 2019). ↑
See Glenn D. West, No-Third-Party-Beneficiary Clauses and the “Ever-Evolving Contractual Arms Race,” Weil’s Glob. Priv. Equity Watch (Sept. 9, 2020). ↑
See Glenn D. West, Stuff You Might Need to Know: What Assignments Do Broad Anti-Assignment Clauses Not Prohibit?, Weil’s Glob. Priv. Equity Watch (Aug. 9, 2021). ↑
A word borrowed from Ken Adams. See Ken Adams, In Contracts, It’s Best to Practice Good Semantics Hygiene, Adams on Cont. Drafting (Mar. 19, 2025). ↑
See Glenn D. West, Making Sure Your Survival Clause Works as Intended, Bus. L. Today (Mar. 7, 2025). ↑
See Glenn D. West, Indemnification 101: Without a Loss There Is No Claim, Weil Priv. Equity Sponsor Sync, Jan. 2024, at 16; Glenn D. West, How a 12 Month Survival Period Can Become A Lot Longer (or Not)—the Required Notice of Claim, Weil’s Glob. Priv. Equity Watch (Mar. 22, 2018); Glenn D. West, Making Sure Your Survival Periods Actually Work as Intended, Weil’s Glob. Priv. Equity Watch (Feb. 22, 2016). ↑
No. N23C-08-292 PRW CCLD, 2025 WL 898339 (Del. Super. Ct. Mar. 24, 2025). ↑
Id. at *2; Purchase and Sale Agreement, by and among Hollandia Produce Group, Inc. Employee Stock Ownership Trust, Mosaic Capital Investors I, LP, True West Capital Partners Fund II, L.P. F/K/A Seam Fund II, LP, Mosaic Capital Investors LLC, solely in its capacity as Sellers’ Representative, Hollandia Produce Group, Inc., Local Bounti Operating Company LLC, and Local Bounti Corporation, dated as of March 14, 2022, Section 8.01(a). ↑
Purchase and Sale Agreement, supra note 13, at Section 8.05(a). ↑
2025 WL 898339, at *2; Purchase and Sale Agreement, supra note 13, at Section 11.03 (emphasis added). ↑
2025 WL 898339, at *3. ↑
Id. at *4 (quoting DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005)). ↑
Id. ↑
Id. ↑
Id. ↑
Purchase and Sale Agreement, supra note 13, at Section 11.10. ↑
722 F. Supp. 2d 496 (D. Del. 2010). ↑
See Glenn D. West, Mining for Gold in Contractual Boilerplate, Weil Priv. Equity Sponsor Sync, Autumn 2024, at 24. ↑
Purchase and Sale Agreement, supra note 13, at Section 11.04. ↑
See, e.g., 13 Fletcher Corp. Forms § 61:91 (5th ed.) (“(h) any reference to a document or set of documents, and the rights and obligations of the parties under any such documents, means such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions, or replacements thereof”). ↑
Glenn D. West, Transactional Lawyering as an Art: When Saying Less Is More Than Enough, Bus. L. Today (Feb. 11, 2025). ↑
Ken Adams, What’s Semantic Acuity, and How Can I Get Some?, Adams on Cont. Drafting (Mar. 2, 2025). ↑
Darmstadter, supra note 4, at 17. ↑
Glenn D. West, Another Consequential Damages Redux: A Response to “Consequential Damages Clauses: Alien Vomit or Intelligent Design?,” 102 Wash. U. L. Rev. 633, 648 (2024). ↑
I do teach a course that covers this stuff at SMU Dedman School of Law. See Glenn D. West, Teaching Contract Drafting through Caselaw—A Syllabus and a Collection of My Musings About Contract Drafting Based upon Recent Cases (2023). ↑
