20 Ways Boilerplate Language Creates Unexpected Contract Problems (and How to Prevent Them)
Boilerplate language in contracts can lead to unexpected problems, potentially costing businesses time and money. This article explores various ways standard contract terms can create issues and offers expert-backed solutions to prevent them. Drawing on insights from legal professionals, it provides practical strategies for customizing contract language to better protect your interests and avoid common pitfalls.
- Customize Force Majeure Clauses for Jurisdictions
- Define Material Adverse Change Thresholds Clearly
- Specify Lien Responsibility in Probate Sales
- Address Non-Traditional Loans in Financing Contingencies
- List Exact Closing Costs to Avoid Disputes
- Disclose Known Defects in Property Sales
- Include Specific Weather Events in Contracts
- Clarify Repair Obligations in Purchase Agreements
- Set Exact Timelines for Loan Approvals
- Define Supplier Obligations in Franchise Agreements
- Tailor High-Risk Areas in Contract Reviews
- Align Performance Metrics with Client Goals
- Push for Neutral Arbitration in Agreements
- Customize Data Ownership Terms for Clients
- Require Specific Vendor Insurance and Indemnification
- Match Amortization to Property Appreciation Curves
- Update Compliance Language for Current Regulations
- Define Specific SEO Performance Metrics
- Customize Renewal and Termination Clauses
- Include HIPAA Timelines in IT Contracts
Customize Force Majeure Clauses for Jurisdictions
Yes, I encountered a significant issue involving boilerplate language in a cross-border joint venture agreement. The contract included a standard force majeure clause, which—though common—was overly generic and did not reflect the specific commercial realities of the jurisdictions involved.
When a geopolitical event disrupted supply chains, the foreign party sought to invoke the force majeure clause. However, because the clause did not specify what would constitute force majeure in that particular region, and contained no clear mechanism for notification or mitigation obligations, the dispute escalated into litigation. The local court ultimately ruled that the event did not meet the vague threshold set by the clause, leading to reputational and financial harm to our client.
What I do differently now
This experience reshaped how I approach boilerplate clauses. I no longer treat them as standard or untouchable. Instead, I customize each one with precision, especially for force majeure, dispute resolution, governing law, and indemnification. I also hold a red-flag review session with clients and counterparties to ensure mutual understanding of their real-world implications. Additionally, I implement a jurisdiction-specific checklist to stress-test clauses for enforceability and relevance in each applicable legal system.
This change in practice has significantly reduced ambiguities and improved risk allocation in my contracts.
Define Material Adverse Change Thresholds Clearly
The problem arose when boilerplate termination language in a corporate acquisition contract allowed either party to walk away for a "material adverse change" without defining what that actually meant. At AffinityLawyers.ca, the buyer attempted to escape the deal when the target company lost one client representing 8 percent of revenue, claiming this constituted a material adverse change even though client turnover was normal in that industry.
I believe that the issue with standard contract language is that it sounds protective until you actually need to enforce it and discover the terms are too vague to be useful. The specific situation was exacerbated because the boilerplate language came from a different industry where material adverse change thresholds were much lower than what made sense for professional services.
What I do now is customize every definition section based on the specific industry and deal structure instead of copying language from previous contracts that might not fit the current situation. The change that prevents similar problems is including percentage thresholds and specific examples of what does and does not constitute a material adverse change.
The outcome was six months of expensive litigation that could have been avoided with better contract drafting. My client ultimately won but spent $150,000 in legal fees defending a deal that should have closed smoothly with clearer language from the beginning.
Specify Lien Responsibility in Probate Sales
I encountered an issue once where a standard probate sale contract used boilerplate clauses that didn't specify responsibility for property liens. In one instance, the buyer assumed the seller would clear all liens before closing, while the estate assumed the buyer accepted the property as-is. The result was weeks of delay with both sides frustrated and legal teams now involved. It occurred to me during that negotiation that customizing those clauses early saves everyone headaches. Now, I ensure that I clearly assign lien or debt responsibility upfront instead of relying on vague, default language.
Address Non-Traditional Loans in Financing Contingencies
In one deal, I relied on a standard financing contingency that didn't address portfolio lending. The loan officer flagged the clause as incompatible with non-QM requirements, which delayed closing by weeks. On the job, I now tweak those sections to spell out exceptions for commercial and non-traditional loans, so everyone is clear upfront. It saves me from scrambling at the eleventh hour and keeps investors confident in the timeline.
List Exact Closing Costs to Avoid Disputes
I once closed on a house where the boilerplate language around closing costs created tension with the seller. The contract simply said "customary fees," which meant very different things to each side, and it nearly delayed the payout. Now I always edit that section to list out the exact costs: title policy, escrow fees, and so on. I keep that adjustment in my back pocket for when emotions run high because money is at stake. What I've learned is that simple wording tweaks upfront keep deals moving smoothly to the finish line.
Disclose Known Defects in Property Sales
I remember a property sale where the boilerplate 'as-is' language ended up creating confusion. The buyer later discovered structural issues that we technically didn't have to fix, but it caused mistrust because we hadn't highlighted the problems in plain language. Now, I always add an upfront disclosure clause and spell out known defects clearly to avoid any misunderstandings down the line.
Include Specific Weather Events in Contracts
During one renovation season, our contracts had a standard force majeure clause that excluded weather delays. When hurricanes hit Louisiana, projects were delayed for months and budgets spiraled, yet the clause didn't cover those setbacks. After that, we updated every agreement to explicitly include weather events, so expectations are clear and both sides can plan realistically.
Clarify Repair Obligations in Purchase Agreements
Early in my career, I relied on generic purchase and sale agreements that had vague language about repair responsibilities. One deal fell apart because the contract didn't clearly state whether the seller or buyer would cover unexpected code compliance fixes. That misstep cost weeks of delays and nearly resulted in the loss of the property. Nowadays, I make sure every agreement spells out repair obligations in plain terms, leaving no room for confusion. If you're drafting contracts, don't assume boilerplate covers you; tighten up the clauses that directly impact your bottom line.
Set Exact Timelines for Loan Approvals
I once saw a boilerplate 'reasonable efforts' clause in a real estate financing agreement create headaches when a borrower assumed it meant guaranteed funding speed. Because we deliver bridge loans where timing is critical, that vague wording led to unnecessary disputes about what was 'reasonable.' Now I specify exact timelines for approvals and funding so expectations are aligned. It reduces miscommunication and keeps projects moving without costly delays.
Define Supplier Obligations in Franchise Agreements
One situation where boilerplate language backfired was in a franchise supplier agreement. The standard contract had vague liability terms, and when a supplier missed obligations, the franchisees looked directly to us for accountability. During crunch week at Dirty Dough, that language gap was the only thing keeping operations from spiraling. Now, I'm careful to clearly define supplier obligations and indemnification clauses so the franchise network has proper protection. Honestly, it's easier and safer to spend extra time customizing these sections than to fix costly missteps later.
Tailor High-Risk Areas in Contract Reviews
Generic words may save time today, but thoughtful precision prevents problems tomorrow.
We once had a contract where standard boilerplate language around liability seemed harmless at first, but it led to significant misalignment between parties when a rare edge-case scenario arose. It became clear that relying on generic clauses without considering context can create real operational and legal headaches. Since then, we've implemented a process where every contract undergoes a tailored review focused on high-risk areas, ensuring the language reflects both the intent and practical realities of the agreement.
Align Performance Metrics with Client Goals
Using boilerplate language in contracts can cause complications when it is not customized to the specific situation. For example, a marketing agency's contract with a vendor included generic performance metrics and revenue-sharing clauses. As a result, the vendor focused only on click-through rates, while the agency valued overall conversions and ROI. This misalignment in interpretation created frustration, with the vendor being labeled as underperforming despite differing expectations.
Push for Neutral Arbitration in Agreements
We once signed an agreement using the vendor's standard governing law clause without thinking twice, only to later learn that disputes required litigation in their jurisdiction overseas. When an issue arose, the potential legal costs alone were higher than the value of the contract. At FuseBase, we double down on balancing fairness in agreements, especially since remote SaaS partnerships often span multiple countries. Now, I always push for arbitration in a neutral jurisdiction as it keeps resolution faster, fairer, and commercially viable.
Customize Data Ownership Terms for Clients
In one SaaS licensing agreement, boilerplate data ownership language caused unexpected issues when a client assumed they would retain raw export rights. The generic clause didn't match their compliance needs, and we spent weeks renegotiating after go-live. Since then, I make it a point to replace vague intellectual property and data terms with tailored definitions specific to that client's jurisdiction. I keep that approach handy whenever we're drafting initial scopes, because assumptions about data rights surface often. The key lesson was that generic legalese can create bigger risks than taking the time to clarify details upfront.
Require Specific Vendor Insurance and Indemnification
In the event industry, I learned the hard way that generic liability language doesn't cover enough. A vendor's mistake once led to damages, and despite having a waiver, our venue was left exposed to claims we thought were covered. That experience really shook us during a big event week. To prevent it from happening again, I now require every vendor to carry specific insurance levels and indemnify the venue in writing. It's a simple change, but it ensures responsibility is clear and we're not carrying risks we didn't create.
Match Amortization to Property Appreciation Curves
I once used a boilerplate seller financing term on a manufactured home, and it failed to factor in how quickly the asset depreciates compared to stick-built houses. The borrower ended up underwater, which created tension and made the exit strategy messy for both sides. Now I build amortization schedules that match the real appreciation curve of the property type, and it has reduced those headaches significantly.
Update Compliance Language for Current Regulations
Early in CLDY's journey, we signed a cloud service contract that used boilerplate compliance language citing outdated privacy regulations. When European clients requested GDPR compliance, we discovered that the standard wording left us exposed. It hit me during that client review that boilerplate language often lags behind real regulatory needs. Since then, I always update contracts with explicit data residency and compliance terms, rather than assuming old language works. I've noticed that proactive updates clear up concerns quickly and build trust with enterprise clients.
Define Specific SEO Performance Metrics
Early on, we used boilerplate 'best efforts' clauses in SEO service contracts, thinking it was a safe catch-all language. That wording turned into disputes when clients expected specific ranking outcomes we hadn't defined. These days, I clearly outline KPIs, such as keyword ranking benchmarks and monthly reporting expectations. It keeps performance measurable and avoids arguments about what 'effort' really means.
Customize Renewal and Termination Clauses
I once worked with a vendor contract where the boilerplate renewal clause automatically extended services we no longer needed. The result was wasted budget on something that added no value, and it took extra legal effort to unwind. These days, I insist on customizing renewal and termination sections so there's always a clear exit plan that matches our operational needs.
Include HIPAA Timelines in IT Contracts
In one IT contract, the standard data breach language conflicted with HIPAA's strict 60-day notification rule. The boilerplate terms simply stated "prompt notification," which sounded fine but legally created gaps in compliance. I have learned to update every dental IT contract with clear HIPAA timelines and defined communication steps. That extra detail keeps practices fully compliant and prevents confusion during audits or incidents.
