The terms of a contract are generally negotiated between the parties to the contract. Boilerplate contracts, however, are contracts where the terms of the contract are already established and in writing. In most cases, a boilerplate contract contains terms favorable to one of the parties to the contract and the other party must either sign the contract "as is" or decline the services or product altogether.
An entire contract may be considered boilerplate, or a contract may simply contain certain boilerplate terms. If all the terms of a contract are already written down and pre-determined, then the contract is considered a boilerplate contract. In some cases, certain terms are left open for negotiations while others are already in writing and cannot be changed. The portions of the contract that cannot be changed or are not open to negotiation are boilerplate terms. The "fine print" at the bottom of many contracts are boilerplate provisions that most people do not read before signing the contract.
Many sales contracts for products or services can be considered boilerplate contracts. Car sales contracts and contracts for home repair services are typical examples. Often, the salesperson making the sale is not authorized to change any of the terms appearing in the contract and therefore nothing is negotiable. The terms found within the contract are usually terms that are extremely favorable to the party that wrote the contract. The purchaser is put in the position where he or she must "take it or leave it."
Consumers often fail to thoroughly read the boilerplate provisions found in contracts to their later detriment. Even when a consumer takes the time to read a boilerplate contract, the contract is often intentionally riddled with complicated legal terms that the average consumer is not familiar with and therefore doesn't understand. If the product or service is something the buyer needs, he or she may sign the contract despite the presence of the boilerplate terms hoping they are not important. Later, if there is a problem with the product or service, the contents of the boilerplate contract become clear.
In many cases, boilerplate contracts are not illegal on their face. They may, however, be considered unconscionable. When it can be established that the party who drafted the contract intentionally took advantage of the other party and created terms that were clearly "unconscionable" or grossly unfair, then a court may void the contract.