Modularity in Contracts: Boilerplate and Information Flow

Authors

Henry E. Smith, Yale Law School

Abstract

Contractual boilerplate is a little like property. Such a statement might seem like a category mistake. After all, contractual boilerplate language is part of contracts, which, unlike property, are freely customizable by the parties. Contracts create rights between those parties, not against the world at large. Nor do people who devise new boilerplate terms usually have intellectual property in the provisions themselves. I will argue that, in an interesting and overlooked way, boilerplate is the first way station on the road from contract to property. In particular, boilerplate, like all legal communication, is the result of striking a trade-off between communicating intensively in a narrow sphere or communicating in a more stripped-down formal way in a wider variety of contexts. Contract and property form something close to comer solutions here. Contracting parties are allowed to be as idiosyncratic as they like, but the idiosyncrasies apply simply to their own dealings-usually not to those of third parties. At the other end of the spectrum, property law deals in simple stable signals with a wide currency, but the rules of property eschew a lot of contextual detail. This makes property rights easy to adapt to many contexts and allows those whose expertise is minimal to avoid running afoul of these in rem rights. The simplicity of property rights also helps potential purchasers to inform themselves about the rights in the process of acquiring them.

Recommended Citation

Henry E. Smith, Modularity in Contracts: Boilerplate and Information Flow, 104 Mich. L. Rev. 1175 (2006).
Available at: https://repository.law.umich.edu/mlr/vol104/iss5/11