Document composition and formats - Using standard clauses, t...

Learning Outcomes

This article covers document composition using standard clauses, templates, and precedents, including:

• The purpose, structure, and effective use of precedents and templates in legal drafting
• Identifying, selecting, and tailoring standard clauses (boilerplate) to the transaction
• Choosing and adapting boilerplate such as law and jurisdiction, notices, entire agreement/non‑reliance, third party rights, assignment/change of control, force majeure, variation, waiver, severance, counterparts, further assurance, and interpretation
• Recognising and mitigating practical risks in precedent use, and recording amendments clearly
• Structuring documents coherently (date, parties, recitals, definitions, operative provisions, schedules, execution)
• Applying clear drafting techniques (plain English, active voice, precise use of “shall”, dates and times, list drafting, and avoiding “and/or” ambiguity)
• Managing collaboration and version control, including travelling drafts, track changes, metadata hygiene, and amendment records
• Meeting SQE2 requirements for compliant, tailored drafting and clear client explanations

SQE2 Syllabus

For SQE2, you are required to understand how legal documents are constructed using precedents and standard clauses, with a focus on the following syllabus points:

• the purpose and use of standard precedents and templates in legal drafting
• identification and proper use of standard clauses (boilerplate provisions)
• evaluation of risks and limitations of relying on precedents
• techniques to tailor drafted documents to client instructions
• appropriate amendment, explanation, and record-keeping in relation to document use
• the structure of agreements (date, parties, recitals, definitions, operative terms, schedules, execution/signature formalities)
• clear drafting techniques (plain English, active voice, appropriate use of “shall”, avoiding ambiguity with “and/or” and list drafting)
• selection and drafting of key boilerplate: entire agreement/non‑reliance, notices, waiver, variation, severance, counterparts, further assurance, third party rights (Contracts (Rights of Third Parties) Act 1999), assignment/change of control, law and jurisdiction, force majeure, interpretation
• fairness and enforceability of standard terms (UCTA 1977 reasonableness, CRA 2015 fairness and prominence for consumer contracts) and exclusions/limitations (including negligence and fraud)
• collaboration tools and hygiene, including showing changes, travelling drafts, clearing metadata, and version control

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Why is it important to record amendments made to a precedent document when preparing a client agreement?
2. Which of the following is a core reason NOT to copy a precedent uncritically? a) efficiency
   b) risk of out-of-date law
   c) clear formatting
   d) client satisfaction
3. What is generally the preferred method for showing substantive changes to a contract template shared for review with another solicitor?
4. Explain the purpose of a “boilerplate” clause in a business contract.

Introduction

Legal professionals rarely draft complex contracts or court documents entirely from scratch. Instead, most rely on previously prepared examples—called precedents or templates—and incorporate standard wording for recurring provisions. For SQE2, you must understand how and when to use such documents and the associated legal and practical risks.

Key Term: Precedent
A previously drafted legal document or clause, typically maintained by firms or found in specialist publications, used as a starting point for similar legal drafting tasks.

Key Term: Standard clause (Boilerplate)
A recurring contractual provision with (nearly) universal wording, designed to address general issues such as notices, governing law, or interpretation, applicable across many agreements.

Key Term: Template
A model form document with standard structure and wording, intended to be completed or modified for a particular transaction or matter.

Pre-contract documents such as heads of terms, letters of intent or comfort letters may be part‑binding or non‑binding depending on wording and intention; treat them with care. “Subject to contract” labels, clarity on which terms are binding (e.g. confidentiality, exclusivity), and the avoidance of premature commitments reduce risk. Agreements “to use best/reasonable endeavours to negotiate” can be enforceable as to the endeavours obligation, even if they do not compel entry into a final agreement.

The purpose of precedents and templates

Precedents and templates serve to increase efficiency and consistency in document drafting. Practitioners save time by starting with trusted wording that covers anticipated legal obligations, procedures, and risks.

They also reduce the likelihood of omitting required legal terms. For example, a lease template will contain all the clauses necessary for a compliant lease, ensuring statutory and contractual compliance.

However, precedents must not be copied without careful review. They will rarely match a client's specific facts, instructions, or jurisdiction, and boilerplate text might introduce ambiguities or outdated law. SQE2 candidates must be able to identify when and how to modify standard documents appropriately and record changes clearly.

Sources of reliable precedents include firm know‑how banks, Practical Law and LexisPSL standard documents, and major collections such as Atkin’s Court Forms (contentious forms) and the Encyclopaedia of Forms and Precedents (non‑contentious). Always check currency (online update status, release notes) and tailor structure and content to the current transaction and governing law.

Standard clauses (“boilerplate”)

Many business documents incorporate standard clauses—known as boilerplate—to manage universal issues. Examples include:

• Jurisdiction and governing law
• Force majeure
• Notices
• Assignment and change of control
• Third party rights
• Confidentiality
• Entire agreement and non‑reliance statements
• Waiver, variation, and severance
• Further assurance
• Counterparts
• Interpretation (e.g. definitions, construction rules)

Boilerplate clauses are not mere “filler.” Their interpretation can have significant legal consequences, as seen in numerous contract disputes. For example:

• Entire agreement/non‑reliance: helps reduce the risk of claims based on pre‑contract statements, but it does not exclude fraud, and in consumer contracts must satisfy the CRA 2015 fairness test (be transparent and prominent).
• Notices: specify permitted methods and deemed delivery times. Draft precisely (postal vs email service, timing, and addresses).
• Third party rights: under the Contracts (Rights of Third Parties) Act 1999, parties can allow or exclude enforcement by identified third parties; specify clearly.
• Assignment vs change of control: a no‑assignment clause may not catch a share sale/change of control; consider a separate change‑of‑control clause if identity matters.
• Law and jurisdiction: align clause with parties’ locations and enforcement strategy; understand the difference between exclusive and non‑exclusive jurisdiction.
• Force majeure: define trigger events and consequences (suspension/termination); a modern clause should address supply chain disruption and changes in law, but not excuse payment obligations without careful drafting.
• Waiver/variation: state that waivers must be in writing and signed; specify requirements for valid variations, recognising courts’ approach to “no oral modification” clauses.
• Severance: include a carefully‑drafted severance mechanism to preserve the contract if a term is invalid.
• Indemnities and limitations: draft clearly and consider the reasonableness test (UCTA 1977) and CRA 2015 fairness where applicable; expressly address negligence if intended.

Worked Example 1.1

A solicitor is instructed to prepare a consultancy agreement for a new business. The firm’s document bank contains a standard consultancy template and a set of standard clause precedents (boilerplate). What steps should the solicitor take before sending the draft to the client?

Answer:
The solicitor should:

• Review the template and confirm the core structure fits the client's instruction.
• Ensure all relevant standard clauses are included (or omitted, if inappropriate).
• Carefully tailor factual sections and commercial terms (such as scope or fees) to the client’s requirements.
• Remove or amend any irrelevant wording.
• Check the law applied in the template remains current and appropriate for the transaction.
• Record all substantive changes to the template in the working draft, and, if sending the document for external review, highlight these amendments clearly.

Legal and practical risks of using precedents

Using templates and boilerplates improves efficiency but introduces the risk of errors. The major risks of indiscriminate copying include:

• Incorporation of outdated or inapplicable law.
• Failure to tailor document to the fact pattern, client instructions, or jurisdiction.
• Introduction of conflicting terms or redundant provisions.
• Loss of meaning if standard wording is altered without appreciating its legal effect.
• Confidential information left from previous transactions or unsuitable provisions transferred between unrelated matters.
• Metadata in an edited document inadvertently revealing tracked changes, previous parties or negotiations.
• Unfair or unreasonable clauses (particularly in consumer terms) rendering provisions unenforceable under CRA 2015 or UCTA 1977.
• Misuse of expressions such as “subject to” that change the effect of obligations.

For SQE2, you may be required to spot the inappropriate use of a precedent, explain the consequences of copying a template without scrutiny, or to amend a standard clause which does not meet your client’s aims.

Negotiation history and draft versions of the agreement are generally not admissible to interpret the final contract, so ensure the signed document (including any entire agreement clause) reflects the parties’ intentions. If words bear special trade meanings, define them expressly rather than relying on industry usage.

Worked Example 1.2

A solicitor copies a loan agreement precedent from a previous matter, which includes a clause excluding liability for delay. The current client is lending money and is concerned about the borrower’s late repayment. The exclusion clause accidentally remains in the draft. The client only spots this after signature, when a delay occurs. What is the likely consequence?

Answer:
The lender could be contractually prevented from recovering certain losses for late repayment because of the exclusion clause left in from the precedent. The solicitor may face a negligence claim or disciplinary issue for failing to modify the template correctly.

Good drafting practice when using precedents

To manage risk, adopt the following principles in practice and in SQE2 assessments:

• Read through the entire precedent or template and identify any parts which do not match the client's commercial aims, facts, or instructions.
• Update legal references, statute sections, and terminology as required.
• Keep a clear, dated record and version history of all amendments, especially for documents shared externally.
• Consider whether each standard clause is appropriate or needs adjustment or explanation to the client.
• Avoid introducing conflict, ambiguity, or contradictory provisions.
• Build the document using a logical structure:
  • Date (use full month, e.g. “12 January 2025”).
  • Parties (full legal names, company numbers, registered offices).
  • Recitals (short, factual background; avoid embedding obligations).
  • Definitions (alphabetical list of defined terms used in the operative clauses).
  • Operative provisions (commercial terms and obligations).
  • Schedules (technical or detailed content kept out of the main body).
  • Execution (correct signature blocks and witnessing/deed formalities).
• Use clear, modern English. Prefer the active voice. Use “shall” for obligations and avoid “should”. Avoid archaic and jargon terms where a plain word exists (e.g. “under” instead of “pursuant to”).
• Draft lists carefully to avoid ambiguity from “and/or”; use tabulation and clarifying phrases such as “any or all of” or “either … or … (but not both)” as needed.
• Draft times and dates precisely (e.g. “by 23:59 (UK time) on 10 August 2026”).

Key Term: Amendment record
A document or annotation noting every substantive change made to a precedent or template during the drafting and review stages.

Key Term: Commencement Date
The date the parties intend some or all obligations to take effect under the agreement. It can differ from the date of the agreement and should be distinguished clearly.

Structuring key components well

• Dates: Incomplete or missing dates can cause disputes about when obligations begin or end. Use a full written date and, where needed, separate “date of agreement” and “commencement date”.
• Parties: Use full legal names and, for companies/LLPs, include the registered number and registered office; this ensures certainty even if a name later changes.
• Recitals: State background facts only (e.g. existing agreements or intentions). Number recitals (A, B, C) and signal the start of operative terms (“IT IS AGREED as follows:”).
• Definitions: Keep them concise and used consistently. Avoid packing substantive obligations into definitions. Be cautious with phrases like “unless the context otherwise requires”.
• Plain English: Replace archaic terms (“hereby”, “heretofore”, “aforesaid”) with modern equivalents and keep sentences short, typically under 25 words.
• Active voice: “X shall deliver the goods” is clearer than “The goods shall be delivered”.

Sharing documents and showing amendments

When sharing a draft document with the client, another party, or colleague for review:

• Clearly distinguish your amendments, either by traditional coloured pen (hard copy) or using the track changes feature in word processing software (electronic).
• For major contracts shared with other lawyers, include a “travelling draft” showing additions and deletions, or maintain a running log of changes.
• Never remove standard warnings or update instructions present in some templates (e.g. "Remove this clause if inapplicable") until you have checked whether they are still relevant.
• Before circulating a “clean” draft externally, remove draft stamps, internal references, and clear metadata that could reveal previous negotiations, alternative drafting, or confidential information.
• Check cross‑references, clause numbering, and defined term usage; update fields to refresh any automatic cross-references.

Key Term: Travelling draft
A marked‑up version of the document passed between parties during negotiations, showing cumulative changes as the draft “travels” back and forth.

Key Term: Metadata
Hidden data embedded in electronic files (e.g. prior authors, edits, comments, tracked changes) that may disclose confidential or negotiation‑sensitive information if not removed before sharing.

Practical hygiene includes using document comparison/blacklining between versions, controlling track‑changes settings, and applying firm policies to strip metadata prior to sending. Where counterpart execution is contemplated, confirm the clause provides for signing in counterparts and covers electronic signature if intended.

Worked Example 1.3

You are reviewing a standard business sale agreement. The template contains a "governing law" clause specifying Scottish law, but the transaction now concerns a business in England. What should you do?

Answer:
Amend the governing law clause so it refers to English law. Confirm all references throughout the template are consistent with English jurisdiction and law, and update or remove any other inappropriate references left over from use in a Scottish context.

Worked Example 1.4

A supply contract includes: “Subject to clause 2, the Supplier shall supply 10 crates of beer every month. Clause 2: In December the Supplier shall supply two crates of champagne.” The pub expects both beer and champagne in December. What is wrong and how should it be fixed?

Answer:
“Subject to clause 2” makes clause 2 take priority, potentially displacing the beer obligation in December. If both obligations are intended, use “Without prejudice to clause 1” (or restructure as cumulative obligations): “The Supplier shall supply 10 crates of beer every month. Without prejudice to the preceding sentence, in December the Supplier shall also supply two crates of champagne.”

Worked Example 1.5

Your template states: “X shall apply for a Permit by 3 December 2026.” X plans to submit the application on 3 December. Is this compliant?

Answer:
The phrase “by 3 December” is ambiguous as to whether the date is inclusive. Redraft to remove ambiguity, e.g. “on or before 3 December 2026” (inclusive) or “before 3 December 2026” (exclusive). If a time and time zone matter, state them (e.g. “by 23:59 (UK time) on 3 December 2026”).

Explaining documents to clients

As part of SQE2 practice, you may be required to draft a short client-friendly explanation of a document composed from a template or precedent. This explanation should:

• Summarize the specific effect of critical clauses, especially any key risks, exclusions, or legal obligations.
• Highlight key amendments (e.g. departure from standard terms or unusual provisions).
• Inform the client about any express or implied standard meanings of boilerplate clauses that may affect their rights or liability.
• Use plain English and avoid legal jargon. Keep sentences short and organise with clear headings/subheadings if appropriate.
• Signpost consumer fairness and reasonableness issues (e.g. unilateral variation rights, broad exclusions of liability, or “we may change the price at any time” provisions) where the contract is with an individual acting as a consumer, emphasising CRA 2015 requirements for transparency and prominence.

In consumer terms, avoid clauses that restrict statutory rights or exclude liability for death or personal injury due to negligence. Core price/subject matter terms must be transparent and prominent to avoid fairness assessment of price appropriateness; other terms can still be assessed for fairness.

Exam Warning

For SQE2, you may be given a template to complete or amend. Do not assume all content is appropriate for your scenario. Read the whole document and tailor as needed. Marks are lost for including irrelevant, redundant, or conflicting terms from precedents when the task requires precise, tailored drafting. Beware of:

• copying archaic or unclear wording that obscures meaning
• leaving jurisdiction/definitions/figures/dates unedited from the precedent
• using “subject to” where “without prejudice to” is intended
• ambiguous lists (“and/or”), imprecise dates (“by [date]”), and passive voice that hides who must act
• failing to show your changes clearly or to remove confidential metadata from shared drafts.

Revision Tip

Standard clauses and boilerplates commonly recur in contracts and are prime targets for single-best-answer and practical drafting SQE2 questions. Prepare concise outlines of common boilerplate terms and practice explaining their legal effect. Also practise:

• distinguishing date of agreement vs commencement date
• re‑drafting “and/or” lists with tabulation and clarifying phrases
• tightening exclusion/limitation clauses to reflect UCTA/CRA constraints and to mention negligence where intended
• using active voice and “shall” for obligations.

Key Point Checklist

This article has covered the following key knowledge points:

• Precedents and standard templates are starting points for legal drafting, not final documents.
• Boilerplate clauses address general contract issues and require scrutiny in every transaction.
• Risks of using precedents include outdated law, irrelevant terms, conflicting provisions, and hidden metadata.
• All amendments to documents and precedents must be recorded and clearly shown, with good version control hygiene.
• Structure documents coherently: date, parties, recitals, definitions, operative provisions, schedules, execution.
• Use plain English, active voice, and precise list/datetime drafting; avoid “and/or” ambiguity and archaic wording.
• Tailor entire agreement, notices, assignment/change of control, third party rights, force majeure, and law/jurisdiction to the deal.
• Apply UCTA 1977 and CRA 2015 to exclusions/limitations and consumer terms; do not attempt to exclude fraud.
• Avoid embedding obligations in recitals or definitions; keep obligations in operative clauses.
• Practise clear explanations and tailored changes when composing client documents for SQE2.

Key Terms and Concepts

• Precedent
• Standard clause (Boilerplate)
• Template
• Amendment record
• Travelling draft
• Metadata
• Commencement Date