The Issues With Standard Clauses and Commercial Contracts


Jan 19, 2017

Most commercial contracts and commercial agreements come with “standard clauses”. These are necessary portions of the agreement that carry specific meaning and serve the purpose of providing rights and obligations on the parties entering into the commercial contract.

However, while these clauses are standard, they can have significant effects. And often, these effects may produce unforeseen or unwanted results from the contract. It is important that each commercial contract or commercial agreement you enter to has its standard clauses reviewed for impact on the specifics of the transaction taking place.

When left unreviewed, these standard clauses can mean the original intent of the agreement is not reflected in the wording of the agreement itself, which is legally-binding once signed.

Here are examples of issues with standard clauses:


The waiver standard clause is included in commercial contracts to avoid a party waiving one of its rights within the contract due to inaction. So, just because one party did not enforce its rights after a violation of the agreement, that does not mean they are waiving that right. The waiving of rights should only be done by amendment to the agreement.

Dispute Resolution

This standard clause outlines how any issues between the contracting parties will be resolved. It is important that this clause is reviewed and amended if necessary to reflect the wishes of both the parties entering the commercial agreement. For example, if the clause says that disputes will be settled by binding arbitration, it may restrict the ability to litigate the dispute.


The assignments clause allows, or restricts, one party’s right to transfer their rights and obligations to a different person. Because you’re entering into an agreement with a person, it may be important for you that that person remains the contracted party. If so, it is important for the assignments standard clause to specifically disallow any transferring of the commercial agreement.

Finding a Niagara Business Lawyer

These are just a few examples of standard clauses and their impact on commercial contracts. It is important that you have a business lawyer with experience in commercial law and contract law review your agreements so that you do not miss anything or do not have an unwanted outcome due to a standard clause. To ensure your commercial contracts fulfill your intent, contact the trusted Business law team at Chown Cairns St. Catharines law firm today.

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