Boilerplate Provisions Can Lead to Surprises During a Sale

13 May 2013 Publication

Texas Lawyer

When a company goes through a sale process, a buyer will review the seller company's contracts to confirm that they are good, enforceable and do not pose any unsuspected risk. However, issues can arise in the mundane provisions appearing mostly at the end of the contracts — the "boilerplate." These provisions govern a wide variety of matters, such as dispute resolution, damages, interpretation and other matters. 

Below are examples of surprises that may be encountered, and perhaps avoided, in the boilerplate.

Surprise No. 1: The seller company waived its right to certain types of damages. A buyer may alter its risk assessment of the seller company if it learns that the seller company waived its right to consequential, special and incidental damages in parts of its contracts.

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