Standard Boilerplate Clauses — English Law

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Reference for English-law boilerplate clauses — entire agreement, severance, NOM, force majeure, governing law, indemnities, LoL, third-party rights.

English commercial contracts cluster their procedural and risk-allocating provisions at the end of the document under a “Miscellaneous” or “General” heading. These boilerplate clauses look standardised but carry significant substantive weight: they allocate risk, define remedies, set the forum for disputes, and route around the common-law defaults considered in the English contract law basics and unfair contract terms references. This page treats each of the principal boilerplate clauses in turn, with an analysis of the leading authorities and sample drafting language. It is the cross-handbook reference for the recurring drafting moves; specific contract types in the handbook will reference back to this page rather than restating the analysis.

A note on drafting style. The clauses below are presented in plain commercial English, suitable for sophisticated commercial contracts between legally advised parties. Adjustments for consumer-facing contracts (CRA 2015 transparency requirements, fairness controls) and for small-business contracts (UCTA reasonableness considerations) are flagged where the substance differs materially.

Entire Agreement / Integration

The entire-agreement clause performs two related functions. First, it identifies the contract as the complete and exclusive expression of the parties’ agreement on the subject matter, displacing prior negotiations, drafts, letters of intent, and oral discussions. Second, it ensures that pre-contractual statements not incorporated into the document cannot found a claim for breach of contract or — if the drafting is sufficiently broad — for misrepresentation.

The leading authorities are Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] 2 Lloyd’s Rep 611 and AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133. Inntrepreneur confirmed that a properly drafted entire-agreement clause displaces any side-collateral-contract argument. AXA (Rix LJ) set out the modern test for excluding misrepresentation liability: the clause must say so explicitly. The conventional formula “this agreement constitutes the entire agreement between the parties” excludes prior representations integrated into the contract but does not of itself exclude liability for misrepresentation (a pre-contractual statement of fact that induced the contract). To exclude misrepresentation liability, the clause must say so in terms — and the exclusion is then subject to the reasonableness test under UCTA s.8 / s.3 of the Misrepresentation Act 1967.

Sample drafting:

Entire Agreement. This Agreement, together with the documents referred to in it, constitutes the entire agreement between the parties relating to its subject matter and supersedes all prior agreements, understandings, representations, warranties, and arrangements between them on that subject matter, whether oral or written. Each party acknowledges that, in entering into this Agreement, it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance, or warranty (whether made innocently or negligently) other than as expressly set out in this Agreement. Nothing in this clause shall limit any liability for fraud or fraudulent misrepresentation.

The fraud carve-out at the end is essential — HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6 confirmed that liability for fraud cannot be excluded as a matter of public policy.

Severance / Blue-Pencil

A severance clause provides that if any provision of the contract is held invalid or unenforceable, the remainder shall continue in force. The clause matters most for restrictive covenants in employment contracts (post-termination non-compete, non-solicit, non-deal) and for contractual provisions touching on statutory illegality (anti-competition, consumer protection, sanctions).

The Supreme Court’s decision in Tillman v Egon Zehnder Ltd [2019] UKSC 32 substantially restated the blue-pencil test for restrictive covenants. The test has three stages: (1) the unenforceable part must be capable of being removed without adding to or modifying the remaining wording — the blue pencil simply strikes out the offending words; (2) the remaining terms must continue to be supported by adequate consideration; and (3) the removal of the unenforceable provision must not generate a major change in the overall effect of the post-employment restraints. The decision substituted this for the more restrictive earlier test in Beckett Investment Management Group Ltd v Hall [2007] EWCA Civ 613 — though the Beckett approach to severance in commercial contracts more broadly is still cited.

Sample drafting:

Severance. If any provision of this Agreement is or becomes invalid, illegal, or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal, and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision under this clause shall not affect the validity and enforceability of the rest of this Agreement.

No Waiver

A no-waiver clause is designed to prevent a party’s forbearance from enforcing a right on one occasion from operating as a waiver of that right on future occasions. The common-law position is that waiver requires a clear and unequivocal representation by the entitled party that it will not enforce the right, plus reliance by the counterparty. The no-waiver clause raises the threshold by requiring that any waiver be in writing and signed.

In practice, no-waiver clauses can sit uneasily with the course-of-dealing doctrine — repeated forbearance over a long period can in some circumstances overcome the clause. The drafting strategy is to bolster the clause with prompt reservations of rights in correspondence when a breach is detected but not acted on.

Sample drafting:

No Waiver. No failure or delay by a party to exercise any right or remedy under this Agreement shall constitute a waiver of that right or remedy or operate to prevent the exercise of any other right or remedy. No single or partial exercise of any right or remedy shall prevent its further exercise. A waiver of any right or remedy under this Agreement shall be effective only if it is in writing and signed by the waiving party.

Assignment / Anti-Assignment

The English default is that contractual benefits are freely assignable at common law (and statutorily, under s.136 of the Law of Property Act 1925 for legal assignment), unless the contract otherwise provides. Contractual burdens (i.e. obligations) are not assignable; they require novation. Anti-assignment clauses are routinely included to prevent unwanted counterparty changes.

Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85 confirmed the enforceability of anti-assignment clauses and held that an assignment in breach of such a clause is ineffective at law, with the result that the assignor retains the right of action. The “no-loss” problem identified in that case — that the assignor may have no substantive loss because it has parted with its interest — has been the subject of subsequent refinement in Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518.

Sophisticated drafting typically includes carve-outs allowing assignment within a group of companies (intra-group restructuring) and in the context of a sale of the whole or substantially the whole of the business.

Sample drafting:

Assignment. Neither party shall assign, transfer, charge, sub-contract, or deal in any other manner with all or any of its rights or obligations under this Agreement without the prior written consent of the other party, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing, a party may assign or transfer its rights and obligations under this Agreement to (a) a member of its group (as defined in s.474 of the Companies Act 2006), or (b) a purchaser of all or substantially all of its assets or business to which this Agreement relates, in each case on giving prior written notice to the other party.

Variation and No Oral Modification

A no-oral-modification (NOM) clause provides that the contract can only be varied in writing signed by both parties. The status of NOM clauses was settled by the Supreme Court in Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24 (Lord Sumption). The decision upheld the effectiveness of NOM clauses: a purported oral variation of a contract containing a properly drafted NOM clause is ineffective. The decision reversed earlier authority that had treated NOM clauses with scepticism.

Two practical points. First, Rock did not decide that NOM clauses are absolute — Lord Sumption noted that estoppel could in principle cure the absence of the formal requirement, though only on strict conditions. Second, where the parties want to vary the contract by something less than a signed document, they must draft for it (e.g. exchange of emails, electronic signing).

Sample drafting:

Variation. No variation of this Agreement shall be effective unless it is in writing and signed by or on behalf of each of the parties. A signed agreement to vary may be made by electronic means (including by qualified electronic signature) and need not be on a single document.

Notices

The notices clause specifies how formal notices required or permitted under the contract are to be given, to which addresses, and when they take effect. Three principal points.

First, methods: post (typically first-class or recorded delivery), courier, personal delivery, email. Fax is largely obsolete in 2026 but still occasionally specified. Notices given by email require careful drafting on delivery (was the email “received”?) and on the question of bounce-back or out-of-office responses.

Second, deemed receipt: the clause should specify when a notice is deemed to take effect — e.g. post deemed delivered 48 hours after dispatch (excluding weekends and public holidays); email deemed delivered when sent provided no bounce-back is received within four hours; personal delivery deemed delivered on delivery.

Third, service on registered office: where a party is a company, service at its registered office (in the case of an English/Welsh/Scottish company, the address appearing on the Companies House register) is effective by virtue of s.1139 of the Companies Act 2006. For foreign companies, alternative service provisions apply.

Sample drafting:

Notices. Any notice given under this Agreement must be in writing in English and may be served (a) by hand at the relevant party’s address set out in this Agreement (or as notified in accordance with this clause), or (b) by recorded-delivery post or by an internationally recognised overnight courier to that address, or (c) by email to the email address set out below. A notice is deemed received: if delivered by hand, on delivery; if by recorded-delivery post, two business days after posting; if by courier, on the courier’s confirmation of delivery; and if by email, at the time of sending, provided no automated delivery-failure notification is received within four business hours.

Force Majeure

English law has no implied doctrine of force majeure. The common-law doctrine of frustration is narrow — it discharges the contract entirely on a high threshold — and does not provide for the more granular relief (suspension, extension of time, partial relief) that commercial parties typically want for less drastic events. To obtain such relief, the parties must include an express force-majeure clause.

The classic drafting structure has four parts: (a) definition of the qualifying events (typically a non-exhaustive list including acts of God, war, terrorism, civil unrest, natural disasters, epidemics, government action, strikes); (b) causation requirement (the event must prevent or hinder performance); (c) procedural requirements (notice, mitigation, use of reasonable endeavours to perform); and (d) consequences (suspension of obligations, extension of time, right to terminate after a specified period of continuing force majeure).

Classic Maritime Inc v Limbungan Makmur SDN BHD [2019] EWCA Civ 1102 confirmed the orthodox approach to causation in force-majeure clauses: the party invoking the clause must show that the qualifying event actually caused the non-performance. A claimant who would not have performed even without the event cannot rely on the clause. COVID-19 cases such as Salam Air SAOC v Latam Airlines Group SA [2020] EWHC 2414 (Comm) and a number of other 2020-2021 decisions tested the doctrine in pandemic conditions; the courts adhered to orthodox principles.

The interaction between force majeure and frustration is important. A well-drafted force-majeure clause can cover the field of the events to which it applies, displacing the common-law doctrine of frustration; or it can leave frustration alive as a fallback. The choice depends on the parties’ risk-allocation preferences.

Sample drafting:

Force Majeure. Neither party shall be in breach of this Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Agreement if such delay or failure results from a Force Majeure Event (defined as any event or circumstance beyond the reasonable control of the affected party, including without limitation acts of God, fire, flood, earthquake, epidemic or pandemic, war, civil unrest, terrorism, embargo, government action, labour disputes (other than disputes involving the affected party’s own workforce), and failure of utilities). The affected party shall: (i) notify the other party promptly of the Force Majeure Event and its expected duration; (ii) use reasonable endeavours to mitigate the effect of the Force Majeure Event; and (iii) resume performance as soon as reasonably possible. If a Force Majeure Event continues for more than 60 consecutive days, either party may terminate this Agreement on 14 days’ written notice.

Hardship and Material Adverse Change (MAC)

A MAC clause allocates the risk of a material adverse change in the target’s business, condition, or prospects between the contracting and the closing date in M&A and financing contexts. Grupo Hotelero Urvasco SA v Carey Value Added SL [2013] EWHC 1039 (Comm) (Blair J) is the leading English authority — a MAC clause must be construed strictly; the change must be material, must affect the borrower’s ability to perform, must not be merely temporary, and must not be a change the parties had contemplated at the time of the contract. Drafters tend to specify both an objective threshold (“a material adverse effect on the Business”) and a series of carve-outs (changes in general economic conditions, changes in the industry, changes in law, action taken in compliance with the agreement).

Sample drafting:

Material Adverse Change. “Material Adverse Change” means any event, change, or circumstance that has, or could reasonably be expected to have, a material adverse effect on the business, operations, financial condition, or prospects of [target/borrower], excluding any event, change, or circumstance arising from: (a) general economic, political, or market conditions; (b) changes affecting the industry in which [target/borrower] operates generally; (c) changes in applicable law or generally accepted accounting principles; (d) any action expressly required or permitted by this Agreement; and (e) any event publicly disclosed to the other party prior to the date of this Agreement.

Governing Law

The governing-law clause selects the substantive law applicable to the contract. The framework is provided by the Rome I Regulation (Regulation (EC) No 593/2008), retained as UK domestic law by the European Union (Withdrawal) Act 2018 with effect from IP completion day (31 December 2020). Under retained Rome I, parties to a commercial contract are free to choose the governing law (Article 3), subject to limited carve-outs:

  • Mandatory rules of the country where all other elements relevant to the situation are located cannot be derogated from by choice of law (Article 3(3)).
  • Overriding mandatory provisions of the forum may apply regardless of choice (Article 9).
  • Public policy of the forum may preclude application of the chosen law (Article 21).
  • Specific protective regimes apply to consumer contracts (Article 6) and employment contracts (Article 8) — choice cannot deprive the consumer or employee of the protection of mandatory rules of their habitual residence (consumer) or place of work (employee).

For B2B commercial contracts between sophisticated parties, the choice of English law is uniformly enforced.

Sample drafting:

Governing Law. This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.

The “including non-contractual disputes” wording is intentional — it captures restitutionary, tortious, and statutory claims that would otherwise be subject to Rome II Regulation (also retained) rather than Rome I.

Jurisdiction

The jurisdiction clause selects the court (or courts) to hear disputes. Post-Brexit, the framework has changed materially.

The Brussels Recast Regulation (EU 1215/2012) ceased to apply to the United Kingdom on 1 January 2021. In its place, two principal regimes:

  • Hague Convention on Choice of Court Agreements (2005) — to which the UK acceded in its own right on 28 September 2020, with effect from 1 January 2021. The Convention applies to exclusive jurisdiction clauses in commercial contracts; signatory states (which include the EU, Mexico, Montenegro, Singapore, and Ukraine) are required to enforce exclusive jurisdiction clauses pointing to the courts of another signatory state, and to recognise judgments of those courts. The Convention does not apply to non-exclusive jurisdiction clauses or to most consumer/employment contracts.
  • Common-law rules for non-Hague defendants — the English court will accept jurisdiction where the parties have agreed and may apply forum non conveniens principles to defendants outside the Hague framework.

The UK’s application to accede to the Lugano Convention 2007 remains under consideration as of 2026 but has not been approved by the EU.

Sample drafting (exclusive):

Jurisdiction. The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Agreement or its subject matter or formation.

Sample drafting (non-exclusive — typically for the benefit of one party):

Jurisdiction. The parties agree that the courts of England and Wales shall have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement. Notwithstanding the foregoing, [name] shall be entitled to bring proceedings against [counterparty] in any court of competent jurisdiction.

Arbitration

An arbitration clause displaces the courts in favour of a private tribunal. The governing statute is the Arbitration Act 1996, which provides the framework for arbitrations seated in England and Wales (the Act applies on a “seat-of-arbitration” basis under s.2). The Act draws heavily on the UNCITRAL Model Law but is not a direct enactment of it; it incorporates English procedural traditions and party autonomy more aggressively in some respects.

Key features:

  • Section 9 — mandatory stay of court proceedings where the matter falls within an arbitration agreement (with the limited exception of agreements that are null, void, inoperative, or incapable of being performed).
  • Section 33 — duty of the tribunal to act fairly and impartially.
  • Sections 67-69 — limited grounds of challenge to arbitral awards: jurisdiction (s.67), serious procedural irregularity (s.68), point of law (s.69, available unless the parties have agreed to exclude it).
  • Section 81 — preservation of arbitration’s special role and recognition of New York Convention awards.

Major institutional arbitration rules used in London include those of the London Court of International Arbitration (LCIA) — broadly Common Law-style with extensive case management; the International Chamber of Commerce (ICC) — Paris-based but widely used in London-seated arbitrations; the International Centre for Settlement of Investment Disputes (ICSID) for investor-state matters; and UNCITRAL Rules for ad-hoc arbitration.

The Supreme Court in Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48 (Lord Hodge) confirmed the strict English-law duty of arbitral impartiality and the disclosure obligations on arbitrators in cases involving overlapping appointments — a decision with significant implications for arbitrator selection in interconnected commercial disputes.

The Arbitration Act 2025 (in force as of 2026) introduced refinements to the s.67 and s.68 procedures, codified the law on the governing law of an arbitration agreement (resolving Enka Insaat v OOO Insurance Company Chubb [2020] UKSC 38 on a statutory basis), and clarified arbitral immunity. Drafters should review the post-2025 framework when selecting English-seated arbitration.

Sample drafting (LCIA):

Arbitration. Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity, or termination, shall be referred to and finally resolved by arbitration under the LCIA Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be [one] [three]. The seat, or legal place, of arbitration shall be London, England. The language to be used in the arbitral proceedings shall be English. The governing law of this arbitration agreement shall be the law of England and Wales.

The express choice of governing law for the arbitration agreement is essential post-Enka — without it, complex conflict-of-laws analysis can result.

ADR and Mediation

ADR clauses can provide for mandatory pre-action mediation before any court or arbitral proceedings are commenced. The clause must be drafted with sufficient certainty as to process and triggers — Cable & Wireless plc v IBM United Kingdom Ltd [2002] EWHC 2059 (Comm) (Colman J) held a CEDR mediation clause enforceable; Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576 (Dyson LJ) addressed (and at the time rejected) compulsory court-ordered mediation, though that position has now been reversed by Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416, which confirmed that courts can lawfully require parties to engage in non-court dispute resolution.

Sample drafting:

Dispute Resolution. If a dispute arises out of or in connection with this Agreement, the parties shall first attempt to resolve the dispute by negotiation between senior representatives. If the dispute is not resolved within 30 days of written notice of the dispute by one party to the other, the parties shall attempt to settle the dispute by mediation under the CEDR Model Mediation Procedure. If the dispute is not settled by mediation within 60 days of the appointment of the mediator, either party may commence [court proceedings] [arbitration in accordance with clause [X]].

Costs and Indemnities

In English court proceedings, costs are governed by the Civil Procedure Rules Part 44 and follow the general principle that costs follow the event — the unsuccessful party pays the successful party’s costs on the standard basis (proportional to the case and resolved in the paying party’s favour on doubt). The indemnity basis is reserved for cases of unreasonable conduct and yields a more generous assessment for the receiving party.

Contractual indemnity clauses can affect this baseline. A clause providing that one party shall indemnify the other for “all costs (including legal fees on a full indemnity basis) incurred in enforcing this Agreement” can support an indemnity-basis award where the contract has been breached.

A contractual indemnity is conceptually distinct from a claim for damages: it is a primary obligation to make good a loss, not a secondary obligation arising from breach. The differences matter for measure of recovery (no remoteness or mitigation principles applied to a pure indemnity), causation (the indemnity covers loss within its terms even if not “caused” by the indemnifier), and the construction of the relevant words.

Wood v Capita Insurance Services Ltd [2017] UKSC 24 reaffirmed the modern English approach to interpretation of indemnities and other contractual provisions: a unitary process of construction giving weight to text and context. The drafter’s task is to ensure the words capture the intended scope without sliding into either over-broad protection (which courts may construe down) or under-broad protection (where the indemnity may fail to cover the very loss the parties intended).

Sample drafting:

Indemnity. Each party (the Indemnifying Party) shall indemnify and hold harmless the other party (the Indemnified Party) against any and all losses, damages, claims, liabilities, costs (including reasonable legal fees on an indemnity basis), and expenses suffered or incurred by the Indemnified Party as a result of (a) any breach by the Indemnifying Party of this Agreement, (b) any negligent act or omission of the Indemnifying Party or its personnel, or (c) any claim by a third party arising from or in connection with the acts or omissions of the Indemnifying Party.

Limitation of Liability and Liability Caps

The limitation-of-liability clause is, with the indemnity, the most economically significant boilerplate in a commercial contract. The clause typically combines:

  • A monetary cap on total liability (often expressed as a multiple of the contract fees, sometimes capped at a fixed sum, sometimes both with a “greater of” or “lesser of” formula).
  • An exclusion of consequential and indirect loss and certain enumerated heads (loss of profit, loss of revenue, loss of business, loss of goodwill, loss of anticipated savings, loss of opportunity, loss of data).
  • Carve-outs from the cap and exclusion for: death or personal injury (UCTA s.2(1) absolute prohibition), fraud and fraudulent misrepresentation (public policy), indemnities and certain breaches that the parties want uncapped (typically confidentiality and IP infringement).

The English meaning of “consequential” is narrower than commercial parties often suppose. Hotel Services Ltd v Hilton International Hotels (UK) Ltd [2000] 1 All ER (Comm) 750 and a long line of authority confirm that “consequential” loss in an exclusion clause refers to losses falling within the second limb of Hadley v Baxendale — i.e. losses not arising naturally from the breach but only by reason of special circumstances communicated at the time of contracting. To exclude losses falling within the first limb (i.e. natural and foreseeable losses, including ordinary loss of profit), the clause must list the relevant categories explicitly.

The clause must also satisfy the UCTA s.3 reasonableness test if it is a B2B clause on the supplier’s standard terms; see unfair contract terms for the framework and the leading authorities (Watford v Sanderson, St Albans v ICL, Goodlife v Hall Fire, Phoenix v Henley Homes).

Sample drafting:

Limitation of Liability. (a) Nothing in this Agreement shall limit or exclude either party’s liability for: (i) death or personal injury caused by its negligence; (ii) fraud or fraudulent misrepresentation; or (iii) any other liability that cannot lawfully be excluded or limited. (b) Subject to (a) above, neither party shall be liable for any (1) loss of profit, revenue, or business; (2) loss of goodwill or reputation; (3) loss of anticipated savings; (4) loss of opportunity; (5) loss of or corruption of data; or (6) indirect, consequential, special, or punitive losses, in each case whether arising in contract, tort (including negligence), or otherwise. (c) Subject to (a) above, each party’s total aggregate liability arising out of or in connection with this Agreement shall not exceed [an amount equal to the fees paid by [Customer] under this Agreement during the 12 months preceding the date of the claim] / [£X].

Liquidated Damages

A liquidated-damages clause fixes in advance the sum payable on breach. Its enforceability is subject to the penalty-clause doctrine restated in Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67. The clause is enforceable provided it protects a legitimate interest of the innocent party and the sum is not extravagant relative to that interest. See unfair contract terms for the doctrine.

Sample drafting:

Liquidated Damages. If [Supplier] fails to complete the Services by the Long-Stop Date, [Supplier] shall pay [Customer] liquidated damages of £[X] per day (or part thereof) until the Services are completed, capped at [Y]% of the Contract Price. The parties acknowledge that this sum represents a genuine attempt to compensate [Customer] for the legitimate interest it has in timely completion and is not a penalty.

Set-Off

A set-off clause regulates whether one party can deduct sums owed to the other from sums owed to it. The English common-law rules on set-off (legal set-off, equitable set-off, banker’s set-off, insolvency set-off) are complex; contractual drafting usually overrides or supplements them.

A clause excluding the customer’s right of set-off is subject to UCTA reasonableness in B2B standard-terms contexts. Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600 (CA) struck down a no-set-off clause in a sale-of-machinery contract as unreasonable on the facts — though the case turns on the specifics and well-drafted clauses with proportionate scope routinely survive.

Sample drafting:

Set-Off. All sums payable under this Agreement shall be paid in full without any deduction, set-off, counterclaim, or withholding (except as required by law). [Optionally:] [Supplier] may set off any liability of [Customer] to [Supplier] against any liability of [Supplier] to [Customer] under or in connection with this Agreement.

Time of the Essence

The clause “time shall be of the essence” makes any deadline a condition of the contract — breach entitles the innocent party to terminate, not merely to claim damages. The default in commercial contracts is that time is not of the essence unless expressly stated. Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1 (CA) confirmed that a party can serve a notice making time of the essence in respect of overdue performance, though the original deadline was not expressly so designated, provided the notice gives a reasonable additional period.

The drafting trade-off: making time of the essence is a powerful protection for the party expecting timely performance but generates a hair-trigger termination right that can cause commercial damage if exercised over a minor delay.

Sample drafting:

Time of the Essence. Time shall be of the essence in respect of the dates set out in [Schedule X] / [for the performance of [specified obligations]].

Third-Party Rights

By default, the Contracts (Rights of Third Parties) Act 1999 allows a third party to enforce a term of the contract if the contract expressly so provides or if the term purports to confer a benefit on the third party (subject to a contrary construction). Most commercial contracts exclude the Act to avoid surprise claims by employees, agents, group companies, or other peripheral beneficiaries.

Sample drafting (exclusion):

Third-Party Rights. A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this clause shall not affect any right or remedy of a third party that exists or is available apart from that Act.

Sample drafting (selective inclusion):

Third-Party Rights. Save as expressly provided in clause [X] [in respect of [specified beneficiary]], a person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

Counterparts and Electronic Signing

A counterparts clause permits the parties to sign separate copies of the same document, with the executed copies together forming a single agreement. The clause is essential in multi-party transactions and is a useful belt-and-braces in any commercial agreement signed remotely.

Electronic signing is generally effective under the Electronic Communications Act 2000 s.7 and the UK eIDAS framework, as confirmed by the Law Commission Report on Electronic Execution of Documents (2019). For deeds and other documents requiring witnessing, the electronic signing must be witnessed in person by an attesting witness — guidance from the Industry Working Group on Electronic Execution (2022 Interim Report; 2023 Final Report) sets out the recommended practice. HM Land Registry accepts certain witnessed electronic signatures and, for registered conveyancers, qualified electronic signatures.

Sample drafting:

Counterparts and Electronic Signing. This Agreement may be executed in any number of counterparts, each of which when executed shall be an original and all of which together shall constitute one and the same agreement. This Agreement may be executed by electronic signature, including by a platform such as DocuSign, Adobe Sign, or Chaindoc; the parties agree that an electronic signature has the same legal effect and enforceability as a handwritten signature.

Confidentiality Survival

Confidentiality obligations are typically expressed to survive termination of the contract for a defined period. The choice of period is commercial: 3-5 years is common in most B2B contexts; longer periods (10 years or “indefinitely” for “trade secrets”) are reasonable where the information has enduring commercial value. Indefinite confidentiality survival is enforceable as a matter of English contract law (and is the default for trade-secret-style obligations), but tempered by the practical reality that the underlying information often loses value or enters the public domain over time.

Sample drafting:

Confidentiality Survival. The confidentiality obligations in clause [X] shall survive termination of this Agreement and continue in force for a period of [5] years from the date of termination, or, in respect of any information that constitutes a trade secret, indefinitely.

Execution as a Deed

The choice between executing a contract as a simple contract or as a deed has several substantive consequences:

  • Consideration: a deed binds without consideration; a simple contract requires consideration.
  • Limitation period: a claim on a deed is subject to a 12-year limitation period under s.8 of the Limitation Act 1980; a claim on a simple contract is subject to a 6-year period under s.5.
  • Formal requirements: a deed must comply with s.1 of the Law of Property (Miscellaneous Provisions) Act 1989 — it must be in writing, be clear on its face that it is intended to be a deed, be validly executed (signed in the presence of an attesting witness for individuals; per the Companies Act 2006 s.44 for companies), and be delivered.

Drafters use deeds for guarantees (to avoid the consideration requirement), powers of attorney (statutorily required), gifts (no consideration), and where the longer limitation period is commercially desirable.

Sample wording (execution block — deed by individual):

Signed as a deed by [name] in the presence of — [signature of attesting witness] [name of witness] [address of witness] [occupation of witness]

VAT Clauses

A VAT clause clarifies whether prices stated in the contract are inclusive or exclusive of value-added tax. The default rule under the Value Added Tax Act 1994 (in particular s.19) is that a price is inclusive of VAT unless the contract states otherwise — meaning that, absent an express clause, the supplier bears the VAT cost out of the stated price. Commercial drafting almost always makes prices VAT-exclusive.

Sample drafting:

VAT. All amounts payable under this Agreement are exclusive of any value-added tax or equivalent sales tax (VAT). Where any taxable supply is made under this Agreement, [Customer] shall, in addition to and at the same time as paying the relevant price, pay to [Supplier] an amount equal to the VAT chargeable on that supply against a valid VAT invoice.

Bibliography

Statutes (legislation.gov.uk)

Case law (bailii.org / supremecourt.uk)

  • Inntrepreneur Pub Co (GL) v East Crown Ltd [2000] 2 Lloyd’s Rep 611
  • AXA Sun Life Services plc v Campbell Martin Ltd [2011] EWCA Civ 133
  • HIH Casualty and General Insurance Ltd v Chase Manhattan Bank [2003] UKHL 6
  • Beckett Investment Management Group Ltd v Hall [2007] EWCA Civ 613
  • Tillman v Egon Zehnder Ltd [2019] UKSC 32
  • Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85
  • Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518
  • Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24
  • Classic Maritime Inc v Limbungan Makmur SDN BHD [2019] EWCA Civ 1102
  • Salam Air SAOC v Latam Airlines Group SA [2020] EWHC 2414 (Comm)
  • Grupo Hotelero Urvasco SA v Carey Value Added SL [2013] EWHC 1039 (Comm)
  • Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48
  • Enka Insaat ve Sanayi AS v OOO Insurance Company Chubb [2020] UKSC 38
  • Cable & Wireless plc v IBM United Kingdom Ltd [2002] EWHC 2059 (Comm)
  • Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576
  • Churchill v Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416
  • Wood v Capita Insurance Services Ltd [2017] UKSC 24
  • Hotel Services Ltd v Hilton International Hotels (UK) Ltd [2000] 1 All ER (Comm) 750
  • Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67
  • Stewart Gill Ltd v Horatio Myer & Co Ltd [1992] QB 600
  • Behzadi v Shaftesbury Hotels Ltd [1992] Ch 1

International instruments

Reports

Cross-references

Disclaimer: This content is informational, not legal advice. Last verified: 2026-05-11. Always consult a solicitor admitted to practise in England and Wales for binding decisions.

Further Reading