Boilerplate, the term for contract provisions that are always in the contract, was originally used in the early 1800s to describe iron that was rolled into plates for steam boilers. Newspapers would use the heavy, thick steel sheets to create engraving copy for continual and regular reprinting [predominantly for ads and syndicated columns]. Newspaper text that would be changed regularly [e.g. the scores in the sports section] would be cast in lead, which was softer and easier to work with. The boilerplate language was the stuff that got used over, and over in the papers. The term has been carried over to legal contracts, and the terms that get reused in nearly all the contracts are commonly called the “boilerplate” provisions in a callback to the old hard-steel, Gilded Age newspapers.
Boilerplate, while repetitive, is there for a reason. They are core provisions that most contracts have because they work. In law, imitation is the sincerest form of flattery, and boilerplate is downright unctuous. Oregon REALTORS® purchase and sale agreements have a handful of standard boilerplate terms, this is what they are and what they mean:
Obligations Survive Death: This provision states that the agreement will survive the death of either or both parties and, “Inures to and is binding upon their successors and estates.” When you sign a contract, your rights in that contract become something you own. When you die, your heirs and estate will sometimes inherit the rights under that contract. For real estate, that is exactly what happens. The death of a Seller does not mean the Buyer simply won’t get the house; it means the Seller’s estate is now in charge of the sale transaction. If the Buyer dies, it doesn’t necessarily mean that the Seller has to find a new buyer; sometimes the Buyer’s heirs will choose to continue the transaction and purchase the property. If the Buyer’s heirs choose to not continue the transaction, it has the same effect as the original buyer terminating the transaction out of the blue: potential loss of the earnest money.
Time is of the Essence: When a contract says “time is of the essence,” it means every single time- and date-related event in the contract is a material term and failure to meet that deadline is a breach of the contract. Without “time is of the essence” provisions in contracts, the dates and deadlines are considered more like suggestions. If time is not of the essence, it would be nice to get the earnest money deposited by June 25, but if we don’t get the money until early July, that’s fine too.
Severability: The law changes around us at all times. Courts may rule a law unconstitutional, legislatures may pass new laws, agencies might pass new administrative rules. When a law changes and a provision becomes unlawful, unconstitutional, impossible to perform, or unenforceable, there is an argument that the whole contract comes crashing down with that unlawful provision. Severability clauses ensure that the contract continues in lieu of the now broken provision.
Nonwaiver: When something goes wrong in a contract, the nonbreaching party generally has the ability to invoke remedies. For example, a Buyer fails to deposit the earnest money when they are supposed to do so; Seller then has the ability to claim a default or terminate the contract [“invoke remedies”]. If the Seller says, “Buyer, I know you failed to deposit the earnest money, but it’s fine, I’m not worried yet,” then a few days later says, “Buyer, I’m worried now and am sending a notice of default,” the nonwaiver provision means the Buyer cannot claim that the earlier waiver of the default notice prevented Seller from sending a future default notice. Nonwaiver means a Seller can be a reasonable or generous party without being penalized for the magnanimity.
Entire Agreement: Parties sometimes talk before and during the contracting process, outside the earshot of their brokers. When a Buyer and Seller know each other and had a handful of agreements in the past, those previous or past agreements can create issues with the home sale transaction. The entire agreement provision makes it so that all of the terms of the contract are written into the contract and the addenda. Previous agreements have no bearing on the present agreement. If the Seller had previously said, “I’ll give you my fridge if the Seahawks win the Superbowl,” that oral agreement is not going to be a part of the present transaction unless the parties put it in writing in a general addendum.
Counterparts: Normally, contracts are supposed to be personally signed by all the parties. In the olden days, everyone would sit around one table and pass the contract back and forth for signatures. In this era of digital signatures and cross-country contracting, having a single copy of a document can create problems. When the postal service misplaces the only existing copy of a contract, it can cause serious delays and sometimes torpedo the transaction. Counterparts provisions allow the parties to each individually sign copies of the same document. When everyone has signed the a copy, you put them all together and pretend the signatures happened on the same single document.