You have a contract in front of you, either one you are about to sign or a template your business uses with customers and suppliers. The first pages deal with the price, the deliverables and the timelines. The last few pages are denser: paragraphs headed governing law, notices, severability, force majeure and counterparts. They look like standard filler, but they answer the questions that matter most when a relationship turns sour.
Boilerplate clauses do not describe what you are buying or selling. They set the operating rules of the agreement: which law applies, which court hears a dispute, how official notices are given, how the contract can be changed, who can take it over, and what happens if a clause is struck down. Where the commercial pages say what the deal is, the boilerplate says how the deal runs and how it ends. This guide walks through each clause you will meet, what it does, the drafting choice that matters most, and the traps that cause problems later.
Which law applies and where a dispute is heard
Which state's law governs the contract
The governing law clause names the law that will be used to interpret and enforce the contract, usually a specific Australian state, for example "the law of New South Wales". It matters even if no one ever goes to court, because it is the lens through which the whole contract is read day to day.
- Nominate a specific state or territory: A clause that says "the laws of Australia" is vague, because contract law in Australia is not a single federal code. Each state and territory has its own statutes and courts, and the choice of law can affect how the contract is interpreted.
- Match the governing law to where you operate: A law you do not deal with regularly adds cost and uncertainty when advice is needed.
- Watch what the other side pushes for: Their home state's law is the common ask. It is not always unreasonable, but you should understand what it means before agreeing.
Which court hears a dispute
A jurisdiction clause names the courts that can hear a dispute, for example "the courts of New South Wales". It can be exclusive, meaning only those courts can hear it, or non-exclusive, meaning those courts can hear it but other courts may also be available.
- Decide deliberately between exclusive and non-exclusive: Exclusive jurisdiction gives certainty and keeps costs predictable. Non-exclusive gives flexibility, for example where you may want to sue the other party in their own state to enforce a judgment against their assets.
- Pair the jurisdiction with the governing law: A mismatch, or a contract with one clause but not the other, invites a fight about venue before the merits are ever argued.
- The trap is leaving both out: If a dispute starts and neither clause exists, the forum is decided by where proceedings can be served, which may be nowhere near you.
How the deal is read, changed and communicated
The written contract is the whole deal
An entire agreement clause states that the written contract is the complete agreement between the parties and that earlier discussions, emails and side promises do not form part of it.
- Scope the clause carefully: A clause covering the whole agreement is broader than one limited to the subject matter, and either can be modified to carve out specific documents listed in a schedule.
- The clause cannot override the law: It does not stop a claim for misleading or deceptive conduct under s 18 of the Australian Consumer Law, which sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (the ACL), because parties cannot contract out of that prohibition.
- The trap is using the clause when the contract does not capture everything: If a side letter or an email exchange is meant to be binding, an entire agreement clause can cut off the very thing you wanted to keep.
How the contract can be changed
A variation clause sets out how the contract can be amended, commonly in writing and signed by an authorised representative of each party.
- Decide who can sign a variation: If any employee can bind the company, the protection the clause is meant to give is diluted.
- Decide whether email counts: If your team routinely agrees changes over email, a clause that requires a signed document creates a gap between the contract and reality.
- Follow the process you draft: When both sides clearly act on an informal change for long enough, conduct can speak louder than the clause, which is why the discipline of putting variations in writing matters more than the wording itself.
- Watch for unilateral variation rights: the other side's draft may include a clause that lets them vary the terms on notice. In standard form contracts, one-sided variation rights are a recognised red flag under the unfair contract terms provisions of the ACL.
How official notices are sent
A notices clause sets out how formal communications such as breach notices, variations and termination notices must be sent, where they must be sent, and when they are taken to be received.
- List the correct addresses and permitted methods: state when a notice is deemed received, for example on the next business day after sending by email.
- Require changes to contact details to be notified in writing: this stops the clause from quietly becoming out of date.
- The trap is a deemed receipt provision: it treats a notice as delivered even if it was never read. It protects the sender, but it also means your own team must actually monitor the nominated inbox.
What happens when things go wrong
When an outside event stops performance
A force majeure clause deals with events outside a party's reasonable control that delay or prevent performance: natural disasters, government action, pandemics, major supply chain failures and significant cyber incidents.
- Force majeure is entirely contractual in Australia: There is no implied force majeure term, and if the contract is silent you fall back on the common law doctrine of frustration, which is a narrow test that is difficult to satisfy.
- A workable clause defines the events covered and any exclusions: it requires the affected party to notify promptly and to mitigate, and sets out the consequences: suspension of obligations, extended timeframes, and a right to terminate if the event persists past a defined period.
- The trap is a clause that covers only traditional "acts of God": it says nothing about modern risks, or it suspends obligations indefinitely with no notice requirement and no exit point.
If one clause is invalid
A severability clause says that if one provision is invalid or unenforceable, the rest of the contract survives.
- Decide whether the clause also allows reading down: an invalid provision can then be trimmed or replaced with a valid substitute that comes closest to the parties' intention.
- Know the limitation: Courts will not rewrite your bargain, and if the invalid clause goes to the heart of the deal, severance may not save the contract.
When leniency becomes a waiver
A waiver clause says that failing to enforce a right on one occasion does not give it up forever, and that any waiver must be in writing and signed.
- Decide how strictly to require writing and who can sign a waiver: set out who can bind each party.
- The trap is thinking the clause is a complete shield: Courts look at conduct as well as documents, and repeated acceptance of late payments can still be treated as a waiver or election despite the clause. It reduces the risk; it does not eliminate it.
How a contract moves and gets signed
Passing the contract to someone else
Assignment and novation clauses control whether the contract can be transferred. Assignment transfers rights, such as the right to be paid. Novation transfers the whole contract, rights and obligations, to a new party, which requires the consent of everyone involved.
- Understand the statutory mechanics of assignment: A legal assignment of a debt or other chose in action generally requires the assignment to be in writing and express notice in writing to the debtor, as set out for example in s 12 of the Conveyancing Act 1919 (NSW). The drafting choice is therefore often about consent: whether assignment is free, requires consent, or is prohibited.
- Think ahead to a sale or restructure: A blanket prohibition on assignment can block the transfer of key customer contracts and slow the whole deal. Consider allowing assignment to related entities or on a business sale, with consent not to be unreasonably withheld or delayed.
Signing in counterparts and signing electronically
A counterparts clause lets each party sign a separate copy of the same document, with the signed copies together forming one contract. In practice most agreements are now exchanged and signed electronically, and Australian law is comfortable with that.
- Understand how the Electronic Transactions Acts work: Under the Electronic Transactions Act 1999 (Cth) and its state and territory counterparts, a transaction is not invalid just because it took place electronically, a writing requirement can be met by an electronic communication that remains accessible for later reference, and a signature is valid if a method is used to identify the signer and indicate their intention to be bound and the method is as reliable as appropriate in the circumstances, with consent. Keep records that show who signed, when, and what they signed.
- Companies have a standard execution path: A company can execute a document under s 127 of the Corporations Act 2001 (Cth), signed by two directors, or a director and the company secretary, or, for a proprietary company with a sole director, by that director in the circumstances set out in the section. Execution under s 127 can be done electronically under the technology neutral signing provisions, and a third party can generally assume the document was duly executed.
- Deeds are the exception to be careful with: A deed must be expressed to be a deed, and witnessing and execution formalities differ across states and territories. The reward for the extra formality is a longer limitation period: in New South Wales, for example, an action on a deed runs for 12 years under s 16 of the Limitation Act 1969 (NSW), compared with six years for an ordinary contract under s 14. If a document needs to be a deed, check the formalities before signing electronically.
Optional clauses worth asking about
These clauses are situational rather than essential, and each is worth including when the trigger applies:
- Survival: keeps confidentiality, indemnities and warranties operating after the contract ends. Include it when obligations need to outlast the agreement.
- Time is of the essence: makes a missed deadline a right to terminate. Include it when delivery or settlement dates are genuinely critical.
- Interest on late payment: provides compensation when invoices are paid late. Include it where payment timing matters and debtors are slow.
- Termination for convenience: lets either party end the contract on notice without proving breach. Include it in long term service arrangements where either side may want an exit.
- Limits on liability: caps or excludes certain losses, often alongside an indemnity. Include it in high risk supply arrangements, and expect the other side to push back on its breadth.
When to have Artificer Legal review your boilerplate
Boilerplate is where template contracts most often go wrong, and it is usually quick to fix once a lawyer looks at it. In a review of your standard terms, an Artificer Legal practitioner would work through the clauses in the order they matter: the governing law and jurisdiction pair first, then the variation and entire agreement clauses, then notices, force majeure and execution mechanics, and finally ACL exposure.
The clauses we would push back on include unilateral variation rights, one-sided termination rights, blanket prohibitions on assignment, silent force majeure and broad indemnities. The variants we would insist on include a specific governing law, an exclusive jurisdiction you can actually use, a notices clause that matches how your team works, and an execution process that fits the document type, especially deeds.
ACL exposure deserves particular attention if you deal in standard form contracts. An unfair term in a standard form consumer or small business contract is void under s 23 of the ACL, and since 9 November 2023, proposing or relying on an unfair term can attract a pecuniary penalty. The definition of a small business contract covers a party employing fewer than 100 people or with turnover under $10 million in its last income year, and the test for unfairness is whether the term causes a significant imbalance in the parties' rights and obligations, is not reasonably necessary to protect the legitimate interests of the party advantaged by it, and would cause detriment if it were relied on. A review can identify the clauses in your templates that fail that test before a regulator or a court does.
The variation clause and how changes are recorded
If there is one clause most worth your attention when you review a contract, it is the variation clause, along with the entire agreement clause that sits beside it. The disputes that sink small businesses are rarely about interpreting the price clause. They are the "we agreed on the phone" disputes: services added without paperwork, deadlines moved by email, payments renegotiated informally. When those disputes arrive, the entire agreement and variation clauses are what a court looks at, and they only help the party that actually followed them.
The drafting choice that makes the difference is not clever wording. It is committing to a change process you will genuinely use, and using it every time. Boilerplate only does its job when the business behind it does its job.
Boilerplate clauses set the operating rules of your contract: which law applies, where disputes are heard, how the deal is changed and communicated, what happens if performance is disrupted, and how the contract is transferred and signed. Most are standard, but each involves drafting choices that affect cost, risk and enforceability. Reviewing them with that in mind, and following your own processes, will save you more than the fine print ever costs.