Costs and Expenses Clause

Clause

The costs and expenses clause is categorised as one of the boilerplate clauses of an agreement. It sets out how any costs and expenses incurred in preparing, entering into and performing an agreement are to be borne by the parties.

The default position is that each party must bear its own costs and expenses.

If the intention is that each party is to bear its own costs and expenses in relation to preparing, entering into and performing an agreement, it is not therefore necessary to expressly state this in the agreement. However, it is common practice to include a clause to that effect anyway, for the avoidance of doubt. If a party does not wish to bear its own costs and expenses then this is a matter for commercial negotiation and a clause setting out how they are to be allocated will be necessary.