Legal Commentary

Boilerplate in commercial contracts (e.g., credit card agreements) has received significant academic attention.  But I've been thinking about boilerplate in what could be called "law enforcement contracts": settlements with the SEC or deferred prosecution agreements with criminal prosecutors.  What if we think about the use of boilerplate as a type of agency lawmaking?

The reasons to use standard language seem obvious.  Electronic drafting lends itself to a cut-and-paste approach, which may be faster than reinventing the wheel.  Also it makes sense to use model language that has been approved inside the organization or (more rarely) that has been tested externally, perhaps in court.

What is more interesting is to think of these provisions as a type of agency lawmaking - and an important one in a world in which the majority of matters are settled through exactly these types of agreements.  Use of these terms strikes me as an ingenious use of limited resources, but also as potentially troubling because lawmaking like this avoids formal processes and puts pressure on the provisions' public availability and the agencies' internal processes approving the language.

One obvious objection to thinking of these agreements as "lawmaking" is that the agreement binds only those who sign it.  But I'm not sure that's enough of an answer.  At least in the SEC context, the speeches of the Commissioners are read like tea leaves.  In other words, the sources of information about the conduct expected from those regulated and about the potential costs of violations are often informal and technically non-binding.

My next few posts will look at some of these issues and give examples of the type of provision I'm talking about.  Meanwhile I'd be interested in your thoughts - Maybe the criminal context is so different from the civil SEC context that we shouldn't think of these contracts as comparable.  Maybe contracts scholars have addressed law enforcement contracts already or have thought about boilerplate in some analogous situation.  Maybe you have seen an example of a provision that puzzled or shocked you.  Comments are welcome.