Week 06 Discussion 01 Boilerplate Provisions Overview The importance of so called boilerplate provisions is often underestimatedespecially by businesspeople who know the business details they want to achieve in a deal but may be less familiar with the legal issues Many people consider the administrative or miscellaneous provisions to be little more than an afterthought or meaningless legalese This is often wrong, but it can be difficult to persuade those who object to boilerplate In the following assignment, you will identify standard contract provisions that can be quite important, and you will make the case for including them in a contract when a manager wants to remove them Instructions You work for an electronics manufacturing company located in the United States Your company plans to sell mobile phones to a distributor in Argentina, and you have drafted a distribution contract A copy of the draft distribution contract can be downloaded Boilerplate Provisions in Client's Draft Distribution Agreement (Word) Your manager wants the contract to be short and simple and says that she considers paragraphs 21 37 of your draft contract to be unnecessary boilerplate She tells you to remove the boilerplate provisions from the contract unless you can make a compelling case for keeping them You disagree with your manager that paragraphs 21 37 are unnecessary and plan to let her know Identify three provisions in paragraphs 21 37 that you believe are important to include in the contract For each, please explain what the provision means and state why you think it is important Boilerplate Provisions in Client's Draft Distribution Agreement BOILERPLATE PROVISIONS IN CLIENT'S DRAFT DISTRIBUTION AGREEMENT In the Week 6 Assignment, your manager says that all of the following provisions are unnecessary boilerplate clauses that should be removed from the company's draft distribution agreement Entire Agreement This Agreement, including and together with any related exhibits, schedules, attachments and appendices, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter The terms of this Agreement prevail over any terms or conditions contained in any other documentation related to the subject matter of this Agreement and expressly exclude any of Distributor's general terms and conditions contained in any purchase order or other document issued by Distributor (excluding the information set out inSection Error Reference source not found Section Error Reference source not found ) Survival Subject to the limitations and other provisions of this Agreement (a) the representations and warranties of the Parties contained herein shall survive the expiration or earlier termination of this Agreement and (b) SECTIONS of this Agreement, as well as any other provision that, in order to give proper effect to its intent, should survive such expiration or termination, shall survive the expiration or earlier termination of this Agreement All other provisions of this Agreement shall not survive the expiration or earlier termination of this Agreement Notices All notices, requests, consents, claims, demands, waivers and other communications under this Agreement must be in writing and addressed to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this Section) Unless otherwise agreed herein, all notices must be delivered by personal delivery, nationally recognized overnight courier, or certified or registered mail (in each case, return receipt requested and postage prepaid) Except as otherwise provided in this Agreement, a notice is effective only (a) on receipt by the receiving Party, and (b) if the Party giving the notice has complied with the requirements of this Section Notice to Seller SELLER ADDRESS Attention TITLE OF OFFICER TO RECEIVE NOTICES Notice to Distributor DISTRIBUTOR ADDRESS Attention TITLE OF OFFICER TO RECEIVE NOTICES Severability If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction provided, however, that if any fundamental term or provision of this Agreement (including FUNDAMENTAL TERMS ), is invalid, illegal, or unenforceable, the remainder of this Agreement shall be unenforceable Upon a determination that any term or provision is invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to the court may modify this Agreement to give effect to the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible Amendments No amendment to this Agreement is effective unless it is in writing and signed by an authorized representative of each Party Waiver No waiver by any party of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the party so waiving Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege Cumulative Remedies All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties, or otherwise Notwithstanding the previous sentence, the Parties intend that Distributor's rights underSection Error Reference source not found andSection Error Reference source not found are Distributor's exclusive remedies for the events specified therein Assignment Distributor shall not assign, transfer, delegate, or subcontract any of its rights or obligations under this Agreement without the prior written consent of Seller Any purported assignment or delegation in violation of this Section shall be null and void No assignment or delegation shall relieve Distributor of any of its obligations hereunder Seller may at any time assign, transfer, or subcontract any or all of its rights or obligations under this Agreement without Distributor's prior written consent Successors and Assigns This Agreement is binding on and inures to the benefit of the Parties to this Agreement and their respective permitted successors and permitted assigns No Third Party Beneficiaries Subject to the next paragraph, this Agreement benefits solely the Parties to this Agreement and their respective permitted successors and assigns and nothing in this Agreement, express or implied, confers on any other Person (including any Customer) any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement The Parties hereby designate Indemnified Parties as third party beneficiaries ofSection Error Reference source not found with the right to enforce this provision Choice of Law This Agreement, including all exhibits, schedules, attachments and appendices attached to this Agreement and thereto , and all matters arising out of or relating to this Agreement, are governed by, and construed in accordance with, the laws ofthe State of STATE , United States of America, without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of STATE Choice of Forum Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, including all exhibits, schedules, attachments, and appendices attached to this Agreement, and all contemplated transactions , including contract, equity, tort, fraud and statutory claims , in any forum other than NAME OF US DISTRICT COURT or , if such court does not have subject matter jurisdiction, the courts of the State of STATE sitting in POLITICAL SUBDIVISION , and any appellate court from any thereof Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees to bring any such action, litigation, or proceeding only in NAME OF US DISTRICT COURT or , if such court does not have subject matter jurisdiction, the courts of the State of STATE sitting in POLITICAL SUBDIVISION Each Party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law Waiver of Jury Trial Each Party acknowledges and agrees that any controversy that may arise under this Agreement, including exhibits, schedules, attachments, and appendices attached to this Agreement, is likely to involve complicated and difficult issues and, therefore, each such Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement, including any exhibits, schedules, attachments, or appendices attached to this Agreement, or the transactions contemplated hereby Counterparts This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement Notwithstanding anything to the contrary inSection Error Reference source not found , a signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement Force Majeure No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other Party under this Agreement), when and to the extent the failure or delay is caused by or results from acts beyond the impacted Party's ( Impacted Party ) reasonable control (which events may include natural disasters, embargoes, explosions, riots, wars or acts of invasion or terrorism, requirements of law, national or regional emergency , strikes, labor stoppages or slowdowns or shortage of adequate power or transportation ) (each, a Force Majeure Event ) A Party shall give the other Party prompt written notice of any event or circumstance that is reasonably likely to result in a Force Majeure Event, and the anticipated duration of such Force Majeure Event An affected Party shall use all diligent efforts to end the Force Majeure Event, ensure that the effects of any Force Majeure Event are minimized, and resume full performance under this Agreement No Franchise or Business Opportunity Agreement The Parties to this Agreement are independent contractors and nothing in this Agreement shall be deemed or construed as creating a joint venture, partnership, agency relationship, franchise, or business opportunity between Seller and Distributor Neither Party, by virtue of this Agreement, will have any right, power, or authority to act or create an obligation, express or implied, on behalf of the other Party Each Party assumes responsibility for the actions of their personnel under this Agreement and will be solely responsible for their supervision, daily direction and control, wage rates, withholding income taxes, disability benefits, or the manner and means through which the work under this Agreement will be accomplished Except as provided otherwise in this Agreement, Distributor has the sole discretion to determine Distributor's methods of operation, Distributor's accounting practices, the types and amounts of insurance Distributor carries, Distributor's personnel practices, Distributor's advertising and promotion, its Customers, and Distributor's service areas and methods The relationship created hereby between the parties is solely that of seller and distributor If any provision of this Agreement is deemed to create a franchise relationship between the parties, then Seller may immediately terminate this Agreement signature page follows IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized SELLER NAME By Name Title DISTRIBUTOR NAME By Name Title

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 13, 2024

Week 06 Discussion 01: Boilerplate Provisions Overview The importance of so-called boilerplate provisions is often underestimatedespecially by businesspeople who know the business details they want

Week 06 Discussion 01: Boilerplate Provisions

Overview

The importance of so-called boilerplate provisions is often underestimatedespecially by businesspeople who know the business details they want to achieve in a deal but may be less familiar with the legal issues. Many people consider the "administrative" or "miscellaneous" provisions to be little more than an afterthought or meaningless legalese. This is often wrong, but it can be difficult to persuade those who object to boilerplate. In the following assignment, you will identify standard contract provisions that can be quite important, and you will make the case for including them in a contract when a manager wants to remove them.

Instructions

You work for an electronics manufacturing company located in the United States. Your company plans to sell mobile phones to a distributor in Argentina, and you have drafted a distribution contract. A copy of the draft distribution contract can be downloaded: Boilerplate Provisions in Client's Draft Distribution Agreement (Word). Your manager wants the contract to be short and simple and says that she considers paragraphs 21-37 of your draft contract to be "unnecessary boilerplate." She tells you to remove the boilerplate provisions from the contract unless you can make a compelling case for keeping them. You disagree with your manager that paragraphs 21-37 are unnecessary and plan to let her know. Identify three provisions in paragraphs 21-37 that you believe are important to include in the contract. For each, please explain what the provision means and state why you think it is important.

Boilerplate Provisions in Client's Draft Distribution Agreement

"BOILERPLATE" PROVISIONS IN CLIENT'S
DRAFT DISTRIBUTION AGREEMENT
In the Week 6 Assignment, your manager says that all of the following provisions are unnecessary "boilerplate" clauses that should be removed from the company's draft distribution agreement.
Entire Agreement. This Agreement, including and together with any related exhibits, schedules, attachments and appendices, constitutes the sole and entire agreement of the Parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter. The terms of this Agreement prevail over any terms or conditions contained in any other documentation related to the subject matter of this Agreement and expressly exclude any of Distributor's general terms and conditions contained in any purchase order or other document issued by Distributor (excluding the information set out inSectionError! Reference source not found. -SectionError! Reference source not found.).
Survival. Subject to the limitations and other provisions of this Agreement: (a) the representations and warranties of the Parties contained herein shall survive the expiration or earlier termination of this Agreement; and (b) [SECTIONS] of this Agreement, as well as any other provision that, in order to give proper effect to its intent, should survive such expiration or termination, shall survive the expiration or earlier termination of this Agreement. [All other provisions of this Agreement shall not survive the expiration or earlier termination of this Agreement.]
Notices. All notices, requests, consents, claims, demands, waivers and other communications under this Agreement must be in writing and addressed to the other Party at its address set forth below (or to such other address that the receiving Party may designate from time to time in accordance with this Section). Unless otherwise agreed herein, all notices must be delivered by personal delivery, nationally recognized overnight courier, or certified or registered mail (in each case, return receipt requested and postage prepaid). Except as otherwise provided in this Agreement, a notice is effective only (a) on receipt by the receiving Party, and (b) if the Party giving the notice has complied with the requirements of this Section.

Notice to Seller:	[SELLER ADDRESS]
	Attention: [TITLE OF OFFICER TO RECEIVE NOTICES]
Notice to Distributor:	[DISTRIBUTOR ADDRESS]
	Attention: [TITLE OF OFFICER TO RECEIVE NOTICES]

Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction[; provided, however, that if any fundamental term or provision of this Agreement (including [FUNDAMENTAL TERMS]), is invalid, illegal, or unenforceable, the remainder of this Agreement shall be unenforceable]. [Upon a determination that any term or provision is invalid, illegal, or unenforceable, [the Parties shall negotiate in good faith to/the court may] modify this Agreement to give effect to the original intent of the Parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.]
Amendments. No amendment to this Agreement is effective unless it is in writing and signed by an authorized representative of each Party.
Waiver. No waiver by any party of any of the provisions of this Agreement shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege.
Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either Party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the Parties, or otherwise. Notwithstanding the previous sentence, the Parties intend that Distributor's rights underSectionError! Reference source not found. andSectionError! Reference source not found. are Distributor's exclusive remedies for the events specified therein.
Assignment. Distributor shall not assign, transfer, delegate, or subcontract any of its rights or obligations under this Agreement without the prior written consent of Seller. Any purported assignment or delegation in violation of this Section shall be null and void. No assignment or delegation shall relieve Distributor of any of its obligations hereunder. Seller may at any time assign, transfer, or subcontract any or all of its rights or obligations under this Agreement without Distributor's prior written consent.
Successors and Assigns. This Agreement is binding on and inures to the benefit of the Parties to this Agreement and their respective permitted successors and permitted assigns.
No Third-Party Beneficiaries. Subject to the next paragraph, this Agreement benefits solely the Parties to this Agreement and their respective permitted successors and assigns and nothing in this Agreement, express or implied, confers on any other Person (including any Customer) any legal or equitable right, benefit, or remedy of any nature whatsoever under or by reason of this Agreement.
The Parties hereby designate Indemnified Parties as third-party beneficiaries ofSectionError! Reference source not found. with the right to enforce this provision.

Choice of Law. This Agreement, including all exhibits, schedules, attachments and appendices attached to this Agreement and thereto[, and all matters arising out of or relating to this Agreement,] are governed by, and construed in accordance with, the laws ofthe State of [STATE], United States of America, without regard to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of [STATE].

Choice of Forum. Each Party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other Party in any way arising from or relating to this Agreement, including all exhibits, schedules, attachments, and appendices attached to this Agreement, and all contemplated transactions[, including contract, equity, tort, fraud and statutory claims], in any forum other than [NAME OF US DISTRICT COURT] or[, if such court does not have subject matter jurisdiction,] the courts of the State of [STATE] sitting in [POLITICAL SUBDIVISION], and any appellate court from any thereof. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees to bring any such action, litigation, or proceeding only in [NAME OF US DISTRICT COURT] or[, if such court does not have subject matter jurisdiction,] the courts of the State of [STATE] sitting in [POLITICAL SUBDIVISION]. Each Party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
Waiver of Jury Trial. Each Party acknowledges and agrees that any controversy that may arise under this Agreement, including exhibits, schedules, attachments, and appendices attached to this Agreement, is likely to involve complicated and difficult issues and, therefore, each such Party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement, including any exhibits, schedules, attachments, or appendices attached to this Agreement, or the transactions contemplated hereby.
Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. Notwithstanding anything to the contrary inSectionError! Reference source not found., a signed copy of this Agreement delivered by facsimile, email, or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
Force Majeure. No Party shall be liable or responsible to the other Party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement (except for any obligations to make payments to the other Party under this Agreement), when and to the extent the failure or delay is caused by or results from acts beyond the impacted Party's ("Impacted Party") [reasonable] control (which events may include natural disasters, embargoes, explosions, riots, wars or acts of invasion or terrorism, requirements of law, national or regional emergency [, strikes, labor stoppages or slowdowns] [or shortage of adequate power or transportation]) (each, a "Force Majeure Event"). A Party shall give the other Party prompt written notice of any event or circumstance that is reasonably likely to result in a Force Majeure Event, and the anticipated duration of such Force Majeure Event. An affected Party shall use all diligent efforts to end the Force Majeure Event, ensure that the effects of any Force Majeure Event are minimized, and resume full performance under this Agreement.
No Franchise or Business Opportunity Agreement. The Parties to this Agreement are independent contractors and nothing in this Agreement shall be deemed or construed as creating a joint venture, partnership, agency relationship, franchise, or business opportunity between Seller and Distributor. Neither Party, by virtue of this Agreement, will have any right, power, or authority to act or create an obligation, express or implied, on behalf of the other Party. Each Party assumes responsibility for the actions of their personnel under this Agreement and will be solely responsible for their supervision, daily direction and control, wage rates, withholding income taxes, disability benefits, or the manner and means through which the work under this Agreement will be accomplished. Except as provided otherwise in this Agreement, Distributor has the sole discretion to determine Distributor's methods of operation, Distributor's accounting practices, the types and amounts of insurance Distributor carries, Distributor's personnel practices, Distributor's advertising and promotion, its Customers, and Distributor's service areas and methods. The relationship created hereby between the parties is solely that of seller and distributor. If any provision of this Agreement is deemed to create a franchise relationship between the parties, then Seller may immediately terminate this Agreement.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.