"The negotiated terms of the contract are important, but it’s the boilerplate that saves your bacon." Heard years ago from a respected colleague, this aphorism has resonated with your scribe. It’s the stuff nobody wants to read or give any attention that makes or breaks a contract when the parties are at loggerheads.

Any contract should be a fair one, considering the rights and obligations of the parties. Because parties to a deal have different bargaining power, the terms might favor one party. As long as the other party can walk away from the deal, that party is voluntarily agreeing to those one-sided terms to get something he or she wants badly enough to agree.

Since the law assumes that both parties to a contract have read it and have access to competent counsel, signing an agreement without reviewing it can be dangerous. Writing and reviewing documents in real estate, business and financial transactions is an art form. Although the temptation is to skip the boilerplate and "just sign it," there are too many pitfalls in those important provisions to gloss over them.

This writer just reviewed a fifty-one page "Indemnity Deed of Trust" drafted by counsel for a major regional bank. The agreement, about three times as long as a "normal" instrument of that type, covered every conceivable issue.

Though the document made for exhausting reading, it was elegantly crafted to make sure that the bank got its money back. After all, asking a bank to hand over a check for hundreds of thousands or millions of dollars is a significant request, and one should expect and hope that the bank will be very careful with its depositors’ money.

Deep in the document was a definition of "personalty," which in the opinion of this writer was incorrect. That definition, the "default" provision used by the bank, changed the deal. By requiring the bank to rewrite it, the intentions of the parties have been preserved.

A recent Maryland Court of Appeals case underlines the importance of boilerplate language. Readers might recall that in 2002, Allfirst Bank suffered significant losses due to falsification of documents by a foreign currency trader. Allfirst was sued by a shareholder who sought to force Allfirst’s Board of Directors to take action against the malefactor.

The shareholder lost. Apparently, the bank’s deposit agreement contained a choice of laws provision requiring the application of Irish law, and a shareholder’s derivative suit is not permitted at Irish law.

In the opinion of the Court, the fact that the deposit agreement contained the phrase "hereunder and thereunder" was sufficient to dispose of the case. One wonders what the outcome would have been if that phrase had been deleted or reworded. With nearly $700 million in losses at stake, the shareholder in the Allfirst case probably wonders, too.

While one probably cannot negotiate the "fine print" of a deposit agreement with a bank, one can negotiate a surprising amount of language in other contracts. It certainly can’t hurt to ask. All they can say is "no."

"The devil is in the details," and sometimes it takes a lawyer to catch the devil at his tricks. Make sure you understand the fine print.