CHAPTER 5

Standard Form Contracts and Contracts Through Electronic Media

§5.1 INTRODUCTION

While some contracts consist of terms that are drafted for the particular transaction, many are based, in whole or in part, on standard terms that have been drafted in advance of the transaction and are incorporated into the offer (or the counteroffer). The use of standard terms in contracts is so widespread that it is surely the norm in modern contracting. This practice is efficient and sensible because most contracts involve commonplace exchanges, and there is no reason to take the trouble to draft individualized terms for each transaction. In some cases, particularly where the offeror engages in many transactions of the same kind, the offeror may have drafted its own standard terms. For example, an insurer, an airline, or a credit card issuer provides its service subject to a standard set of terms that it has drafted to cover all contracts of that kind. In other cases, the offeror may employ standard terms drafted by someone else. For example, the seller of a home may use a standard contract drafted by an association of real estate brokers, or a building contractor may use one drafted by a builder’s trade association. In some cases, the entire contract is in a standard form, with blanks to accommodate matters such as the date of the transaction, the names of the parties and the description of the goods or services sold (that is, it is fully a standard form contract). Even where the whole contract is not on standard terms, an offeror may select individual terms from a form book or a previous transaction. Standard language that is used routinely in many contracts is referred to as boilerplate.

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