Costs and expenses clauses

The Costs and expenses clauses guidance note explains how parties can strategically allocate financial responsibilities within agreements, a critical aspect for legal practitioners drafting commercial contracts. This expert guidance outlines the scope and implications of these boilerplate clauses without revealing full drafting instructions.

Topics Covered

Purpose of this boilerplate clause
Key drafting considerations for this boilerplate clause
Possible approaches
Parties, recitals, definitions and interpretation clauses
Indemnity clauses
Duty

Essential Insights

Assess which costs and expenses each party might incur, including legal fees and professional disbursements.
Evaluate strategic allocation options beyond the standard “each party pays own costs” approach.
Consider the complex interplay of duty (stamp duty) liabilities and contractual indemnities.
Identify critical factors influencing whether one party bears another’s costs under different commercial contexts.
Understand the nuances of legal cost categories, such as solicitor/client versus party/party costs.
Recognise how specific drafting choices impact risk allocation without full compliance steps disclosed.

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