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November 1, 2011Akash D. Sethi, Derrick Carson, Brad L. Whitlock

Boilerplate Provisions

Black’s Law Dictionary defines “Boilerplate” as: “Language which is used commonlyin documents having the same meaning; used to describe standard language in a legal document that is identical in instruments of a like nature.” Boilerplate language certainly serves apurpose to reduce transaction costs and avoid protracted negotiation over what, in many instances, are standard terms. But, too often, lawyers rely on this common usage of the term“boilerplate” when examining, or rather glossing over, relatively customary contractual provisions such as recitals, statements of consideration, and the ever-dangerous miscellaneous section. Like other contractual provisions, mere reliance on form boilerplate provisions can yieldunintended and often unfavorable results. Therefore, attorneys are cautioned to review theseprovisions with the same care as they would review the remaining terms of a given contract.

Analyzing the Puchase and Sales Agreement

The purpose of this article is to address select components of Purchase and Sale Agreements and related issues in the negotiation of Purchase and Sale Agreements in the context of private acquisitions of the stock or assets of private companies. This article begins by describing potential pitfalls associated with entering into what the parties to a future Purchase and Sale Agreement believe is a nonbinding letter of intent. A typical Purchase and Sale Agreement would address the following general components: (1) deal points, (2) closing and closing deliverables, (3) representations and warranties of buyer and seller, ( 4) pre-closing covenants, (5) post-closing covenants, (6) conditions to closing, (7) termination provisions, (8) indemnities, and (9) miscellaneous prov1s10ns including venue, governing law, expenses, notices, damages and dispute resolution provisions. As time does not permit a discussion of each of these components, this article and the presentation for which it is written will focus on key provisions that are customarily the subject of significant negotiation between the parties. The article includes examples of these provisions setting forth alternate provisions favoring buyers and sellers, where appropriate. The reader is cautioned that the sample provisions provided are included to serve as examples of hypothetical provisions. Careful attention should be paid to the drafting of any provision to be included in a specific transaction contemplated by the reader.