Real Estate Boilerplate Contract Fundamentals

Real Estate Influence
April 17, 2013 — 848 views  
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According to contractual law, boilerplate provisions are a set of terms generally pertaining to the enforcement of contracts, which can be used in all contracts where applicable, even if the contracts do not address the same topic. Boilerplate terms can be about assigning rights to the parties involved, the governing law for the contract, execution and termination of the contract, who bears the attorney's fees in case of disputes, waivers, notices, etc. among others.

Boilerplate provisions are usually found at the end of the contract. But that is no reason to presume they are unimportant. The conditions listed in the boilerplate are the guidelines by which the contract is enforced. Real estate contracts are governed by the same laws that govern any other contract, and the following boilerplate clauses are just as effective for real estate boilerplate contracts.

Litigation and Mediation

Breaches of contract can occur from innocent mistakes and misunderstandings, to purposeful breaches. Since litigation is a costly affair, it can be beneficial to include a boilerplate provision calling for an attempt to mediate and settle the differences between the parties in case of a breach, rather than immediately resort to litigation. This prevents the parties from spending unnecessarily on litigation since most civil disputes end in a settlement than a trial.

Additionally, the boilerplate can include conditions that penalize the party that ignores mediation and proceeds to litigating. For example, the party that declines mediation can be made liable to pay the attorneys' fees for both litigating parties.


Often, parties to a contract are from different states or even different countries. In such cases, in your own interest, you need to specify the laws under which the contract is enforced and the forum in which disputes, if any, are handled. Having a boilerplate provision which specifies that disputes will be heard in your state and country will save you considerable time and money in at least traveling and lodging expenses if the other party is from a different region. This is especially useful for real estate contracts, where it is usual to see the two parties to a contract being from different regions.


There are different ways of handling disputes including trial, mediation, and arbitration. Once you have stated that mediation be the first step in dispute resolution, you can next specify which type you will fall upon if mediation fails. You might be under the impression that arbitration is better than trial.

In any arbitration, a third party is chosen to look into the dispute and his decision is final and binding, even if his judgment is wrong or is made without regard to law. You cannot make an appeal if the decision is not in your favor. It might end up being more expensive than a trial. In a trial you are assured the dispute is handled within the confines of the law, and you can always appeal to a higher court if you do not agree with the judgment.

This author is of the opinion that trial is preferable to arbitration and that real estate boilerplate contracts need to specify trial as the next step to mediation.

Attorney Fees

Including this boilerplate clause will ensure that the attorney's fees of the winning party are borne by the losing party in case of a dispute by trial or arbitration. Generally, state laws rule that each party is liable to pay their own attorney's fees, unless specified otherwise in an agreement. If your contract has no provisions overruling this, you might need to bear the fees of your attorney for the trial, regardless of whether you won the case or that you were not the breaching party.

Real Estate Influence