Conflict (order of precedence) clauses

Conflict (order of precedence) clauses are essential boilerplate provisions that resolve inconsistencies within complex agreements or across multiple related documents. This guidance note explores the critical role these clauses play in ensuring clarity and preventing disputes in multifaceted legal arrangements. Practitioners must understand the scope and strategic drafting of these clauses to safeguard transaction integrity.

Topics Covered

• Purpose of this boilerplate clause
• Key drafting considerations for this boilerplate clause
• Possible approaches

Essential Insights

• Assess common sources of conflict within agreements and across transaction documents to establish clear precedence.
• Consider the hierarchical order when multiple agreements intersect, including corporate governance and joint venture contexts.
• Recognise that conflict clauses bind only parties shared across documents, impacting enforceability.
• Evaluate the strategic inclusion of conflict clauses in each document within complex transactional suites.
• Explore modifications for standalone use and nuances in multi-jurisdictional agreements with language inconsistencies.
• Understand the risks of ambiguity without a well-drafted precedence framework to prevent costly disputes.