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Boilerplate Language in Business and Real Estate Agreements: The Devil Really Is In the Details

By Howard C. Stross
June 10, 2016

Have you ever been at a real estate closing or presented with a long agreement containing language and terms you did not understand? Has anyone ever told you, “Don’t worry, it’s just boilerplate”?

Boilerplate is a slang word used to describe language in an agreement which appears to be routine. Be aware, the party providing the boilerplate form has probably developed what is commonly called “standard” language, some or none of which may apply to your situation. The reason for the boilerplate language in a proposed agreement is for protecting the person that provided the boilerplate language, not for protecting you.

Two important items to remember about boilerplate language and so-called standard forms in which the boilerplate language appears: First, all boilerplate language is not the same; and second, boilerplate language is far from “standard.” The boilerplate language may be standard to the person providing it, but it probably is not language that will benefit you. The person providing the boilerplate language may tell you it’s always in agreements that everyone uses. That may be a correct statement; however, it does not take away from the language being unfavorable to you.

The language below is an example of boilerplate language used in an agreement for the purchase and sale of real estate. The underscored language in the example below concerns two related legal concepts known as “Waiver” and “Non-reliance.”

Waiver; Non-Reliance. Buyer understands and acknowledges that the salespersons representing Seller for this transaction do not have authority to make any statements, promises or representations in conflict with or in addition to the information in this Contract and the Community Documents, and Seller and Broker specifically disclaim any responsibility for any such statements, promises or representations. By execution of this Contract, Buyer acknowledges that Buyer has not relied upon such statements, promises or representations and waives any rights or claims arising from any such statements, promises or representations.

Any current or prior understandings, statements, representations, and agreements, oral or written, including, but not limited to, renderings or representations contained in brochures, advertising or sales materials and oral statements of sales representatives, if not specifically expressed in this contract or in the community documents, are void and have no effect. Buyer acknowledges and agrees that buyer has not relied on any such items.

A recent decision out of Florida’s Fifth District Court of Appeals, Ian T. Billington v. Ginn-La Pine Island, Ltd, LLLP, concerns language almost identical to the above. Billington involved the purchase and sale of two high-end residential lots. According to the Buyer, the Seller and their agents made misrepresentations concerning the ability to build private boat docks on the lots, as well as the purchase price of the other lots sold to different buyers. The Buyer brought suit claiming the Seller used fraud to induce him to sign the purchase and sale agreement containing the waiver and non-reliance language. The Buyer alleged reliance on the representations of the Seller and the Seller used the boilerplate waiver language of the contract as a defense to the fraud allegation. The Court held that Florida public policy strongly favors the enforcement of contracts, and:

[C]ontracting parties can protect themselves against such fraudulent practices by respecting the gravity inherent in the contracting process and carefully reviewing a contract to ensure that material representations are expressed in the instrument. The law necessarily presumes that parties to a contract have read and understood its contents. Were we to reach a contrary holding, contracting parties would have no ability to protect themselves against those who would fabricate claims of fraud to avoid the consequences of a contractual obligation. On balance, the sanctity of a contract and predictability of an outcome in a dispute should take precedence where, as here, the parties clearly manifest the intent to avoid such claims.

Id. at 41 Fla. L. Weekly D1204 (Fla. 5th DCA May 20, 2016).

The case law about waivers and non-reliance language varies widely on whether a court will allow the language as a defense to a fraud claim. As in Billington, where the waiver and non-reliance language is clear and unambiguous in the agreement, take the language seriously! Do not assume the language will have no impact to you if later a problem arises after closing your transaction.

One last thought – if you are purchasing real estate or are presented with any type of agreement, before you sign, contact our office at (813)852-6500 for a review of the proposed agreement to determine if there is language that should be modified or eliminated for your benefit.

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