Legal Blog

M & A Nuggets: Boilerplate – Not A Dirty Word


Severability. Integration. Governing Law.  These are just a few of the paragraph headings that appear near the end of a purchase agreement.  These are commonly referred to as boilerplate provisions.  Even though these provisions are located near the end of the agreement, particular attention needs to be devoted to them.  A misstep in drafting one of these provisions could have just as negative an impact on you as would a dispute over a key business term in the agreement.  Let’s explore – Severability means that if one provision in the agreement is invalid, that does not in and of itself make the entire agreement invalid.  Often, the purchaser may insist on provisions in the agreement which stretch the outer limits of what the law would allow.  It is therefore important to have a severability paragraph in the agreement so that, even if one of the provisions is found to be invalid the remainder of the agreement is upheld.  Integration means that the written agreement governs – prior agreements and verbal statements go away.  An integration paragraph makes clear what each side expects and will receive in the deal.  A Governing Law provision indicates which state’s laws govern.  The interpretation of any provision in the purchase agreement could be vastly different, depending upon which state’s laws govern.  These are but a few of the “boilerplate” clauses that should not be reviewed as afterthoughts, but rather should be carefully negotiated.

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Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress






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