What Is a Standardized Contract?

If your team’s spending too much time redlining the same terms over and over, it might be time to switch to standardized contracts. They streamline the negotiation process by giving everyone a clear, consistent starting point.

But what is a standardized contract, exactly?

In this article, we’ll break down what standardized contracts are, what they include, why they’re useful—and share a few real-world examples to help bring it all together.

Key takeaways:

Standardized contracts are typically used in low-risk/low-value scenarios such as terms of service agreements or employment contracts.
They are quicker to use and offer a greater level of certainty.
Remember that they can only be used in a specific set of circumstances.
Software which offers templates and contract automation can greatly speed up the process.

What is a standardized contract?

A standardized contract is a pre-written agreement prepared by one party, typically offered on a take-it-or-leave-it basis, with little to no room for negotiation.

Although you might not have heard the term “standardized contract,” you probably have encountered “boilerplate”, “take-it-or-leave-it”, or “standard form” contracts before.

All these terms refer to the same thing: a contract that’s been entirely prepared by one party and signed without negotiation from the other.

While most other contracts are the result of discussion and negotiation between parties, standardized contracts are rarely able to be negotiated.

This is why they’re sometimes known as “take it or leave it” contracts — signatories usually have no option but to accept the contractual obligations offered by the other party or leave the agreement behind.

You might think this is unfair, and this would certainly be the case if we were talking about contracts with high stakes.

However, standardized contracts are usually used to outline agreements in low-risk and low-value scenarios. They’re especially helpful if you need to send out contracts on a large scale.

Can you imagine how difficult it would be for a business to negotiate bespoke agreements every time they wanted to make a sale, for example?

For this reason, standardized contracts are used every day across a range of different industries and are typically crucial to how your business operates.

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Key features of standardized contracts

When deciding whether to use standardized contracts in your organization, you’ll need to consider whether the main aspects of a standard form agreement are applicable to your circumstances.

Here are the three most important characteristics of standardized contracts.

1. Distributed at scale

Imagine if every time a new user downloaded popular software such as Microsoft Office, they had to negotiate a bespoke contract that allowed them to use the software.

For companies that need to create agreements on a large scale, standardized contracts are the way forward.

2. Minimal negotiation

Another important feature of standardized contracts is the lack of negotiation.

This allows sales to be completed quickly, with customers signing a boilerplate agreement created solely by the selling party.

3. Low risk and low value

If you’re completing a particularly expensive deal or one that carries high levels of risk for either party, you’ll want to create a bespoke contract designed to protect your interests.

Nonetheless, standardized contracts are a great way to complete relatively low-risk or low-value deals.

What goes into a standardized contract?

A key part of figuring out how to write a business contract is selecting the different components you need to include for the agreement to be both effective and legally binding.

When you’re producing standardized contracts, you have to remember that they can only be used in a specific set of circumstances, which will affect what goes into them.

As many standard form contracts are related to transactions, you’ll typically need to include terms of sale, such as pricing, payment schedules, and refund policies.

In contracts such as rental agreements, you’ll also have to put in terms and conditions relating to the property.

If you’re a letting agent, for instance, you’ll usually include the same rules for every property, so there’s no need to draw up specific agreements for each tenant.

It’s also important to include any legal must-haves, and although the agreement isn’t a classic contract, it should still be designed by your legal team.

If a standard form agreement is found to include unfair terms, for instance, you could be liable for damages.

You should also remember that you’ll have a large audience for your contract, so consider using contract software to automate the signing process and speed things along.

The benefits of standardized contracts

There are lots of advantages to using standardized contracts.

They provide businesses with a more streamlined approach, saving time and resources, while also reducing the potential for error.

Let’s take a closer look at some of their benefits.

1. Faster contract creation

With a pre-drafted template that you can easily use for multiple transactions, you’ll find the process of creating and signing contracts is faster.

As you no longer have to create a specific contract for each new sale, for instance, you can move on to new transactions more quickly.

When measured in terms of spending, using standardized contracts is also more cost-effective than having your legal team draft and negotiate agreements for every transaction.

This ensures your business avoids wasteful practices and helps your profit margins expand.

2. Reduced legal costs

Standardized contracts are usually concise and unambiguous, with each clause carefully drafted and designed by a team of legal specialists.

This means you can be certain that both you and the counterparty have a clear understanding of the terms of the agreement, which helps minimize the need for costly legal review or custom edits.

Additionally, standardized contracts that perform certain roles, such as the terms and conditions that accompany the use of software, will often have a shared format.

This means signatories will be familiar with many of the terms used, ensuring all parties are clear about the aims of the agreement. This reduces the time and legal fees typically required to interpret or negotiate terms.

3. Improved productivity

If you use standardized contracts, your legal team will be able to spend less time drafting and negotiating relatively unimportant contracts.

You can integrate your standard form agreements into a streamlined workflow that only involves the legal team when their input is absolutely necessary.

This will help your legal specialists to be more productive, as they can focus on higher value work.

It will also boost productivity across your wider workforce as, with agreements following a familiar format, employees can quickly navigate through contracts and move on to more productive tasks.

4. Easier automation

Digital contract software has made contracts far easier to draft and produce, regardless of whether they’re standardized agreements or not.

However, standard form contracts are especially ideal for automated production processes.

PandaDoc’s templates and contract management system can help your business automate tasks and design templates for all sorts of different types of standardized contracts, such as sales agreements or non-disclosure agreements (NDAs).

Once you’ve created these templates, you can use our software to copy in the template you want to use and make small edits to suit the specific circumstances.

5. eSignatures

Similarly, the homogenous nature of standardized contracts means it’s incredibly easy to integrate standard form agreements into digital contract acceptance processes.

This means you can make use of technology such as eSignatures to speed up the process of signing a contract.

To make the standardized contract process as streamlined and straightforward as possible, you should use digital technology from start to finish.

This might mean incorporating automated production as well as digital acceptance methods.

With standardized contracts, this is easier than ever, as you can simply plug existing templates into the digital process.

eSignatures enhance this kind of workflow even more by reducing manual steps and making sure every signature is securely captured and tracked.

Plus, they’ll help you maintain compliance by generating verifiable audit trails without extra effort.

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When should you use a standardized contract?

You want to use a standardized contract whenever you’re handling a high volume of similar and/or predictable agreements. This is especially true when working with low-risk or routine transactions.

They also work well when you don’t have to worry too much about negotiations, since teams can rely on the pre-approved language from a standard contract, speeding up turnaround time.

Standardized agreements are key when you want to drive consistency and efficiency in your workflow while reducing legal spend.

When should you avoid a standardized contract?

If you’re dealing with complex, high-value, or extremely customized agreements that involve nuanced terms or detailed risk allocation, you probably want to avoid a standardized contract.

These situations can entail tailored legal language that a template can’t typically provide. This goes for situations where you’re operating across multiple jurisdictions or dealing with strict regulatory environments, where you’ll need to incorporate unique compliance requirements.

Standardized vs. customized contract

A standardized contract uses pre-approved, repeatable language that’s meant to improve speed and consistency for low-risk transactions.

These are great because they minimize the need for legal review while streamlining acceptance. They also work well in scenarios when terms don’t change much.

Customized contracts, on the other hand, are created from scratch to address unique requirements, complex deal structures, or higher-risk scenarios.

These contracts can offer you more flexibility and control, but they require more time, negotiation, and legal involvement.

Deciding which route is the best for you will depend on the complexity of the deal, the level of risk involved and how much you need to customize so that both parties are protected.

Examples of standardized contracts

1. Terms of service agreements

Some of the most common examples of standardized contracts are terms of service agreements.

These are used for a range of services — in particular, on websites that require users to create accounts or when users download software as a service (SaaS).

These agreements are necessary to prevent the misuse of a service by users and to outline the responsibilities of the organization when it comes to their personal data.

It would be impossible to negotiate individual contracts with each user across the world, meaning standardized contracts are a must-have for companies looking to create terms of service agreements.

2. Employment contracts

It would obviously be wrong to say that all employment contracts should be standard form agreements.

After all, there’s often scope for negotiation around salary or benefits when an employee joins a company.

However, a standardized contract can still be useful as an overall template for employment agreements.

Standard-form contracts are especially handy for companies that hire a lot of short-term workers or experience high levels of employee turnover.

In these cases, it’s unlikely your new hires will wish to negotiate the specifics of their employment contract, meaning it will save a lot of time to use one standardized contract for all employees.

3. Rental property agreements

Another example of standardized contracts that you’ll probably have experienced are rental agreements.

Property owners will typically outline rent prices, payment schedules, and terms of use in a rental property agreement without engaging in negotiations with the tenant.

Tenants are usually aware of these terms before they sign the contract, meaning there’s no need to use agreements that can be negotiated.

As well as this, landlords will often manage a large portfolio of properties, so using standardized contracts allows them to use one template for all their tenants.

4. Vendor agreements

If a company is working with a lot of other businesses, it can be easier to use a template agreement to set out the terms of the work.

This is often the case with vendor agreements, which will include prices, responsibilities, and obligations in a business relationship.

Standardized contracts allow vendor agreements to be quickly and easily distributed at scale; they also ensure that each vendor receives similar terms.

As well as general vendor agreements, you might want to consider using standard form agreements for more specific contracts, such as a non-compete contract, which are often necessary but carry little risk or value.

5. NDAs

Similarly, non-disclosure agreements (NDAs) are often standardized.

These are used to protect companies that need to share private or confidential information with other parties.

This can include employees, who might have to sign an NDA before they start to work for you, or other companies in the form of contractors.

Regardless of whether you utilize NDAs for your employees or other companies, you’ll probably have to distribute a large number of them, so it’s much easier to use standardized contracts than to draw up a specific contract for each NDA.

Speed up your negotiations with a standardized contract

If drafting contracts feels like it takes forever, you’re not alone. That’s exactly why we built PandaDoc, to cut out the repetitive busywork and make the whole process faster and easier.

With our contract management software, you can:

Build standardized contract templates that anyone on your team can use
Automate approvals and workflows to keep deals moving
Send, sign, and store everything in one place

Ready to simplify your contract workflow? Try PandaDoc for free.

Disclaimer

PandaDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.

Originally published July 19, 2023, updated November 24, 2025

FAQ

What is an example of a standard contract?

A common example of a standard contract is a SaaS terms of service agreement. This form uses a consistent set of clauses for all customers. Some more examples include NDAs, vendor onboarding agreements, employment offer letters, and purchase order terms.

How do you standardize contracts?

You can standardize contracts through templates with pre-approved language, consistent clause structures, and clear formatting. This can involve legal review at the beginning, then you can implement the templates in a contract management or automation tool, like PandaDoc. These templates can be reused for future agreements without having to start from scratch.

What industries commonly use standardized contracts?

Industries like SaaS and tech, real estate, retail, finance, manufacturing, professional services, and more that handle large quantities of similar transactions will typically use standardized contracts. Essentially, anywhere you see repeatable agreements, standardized forms are likely used.

Why do businesses use standardized contracts?

Standardized contracts save time, reduce legal costs, minimize errors, and help maintain consistency across agreements, which is why so many businesses rely on them. Standardization also helps to streamline approval workflows while speeding up signing. Plus, it helps make sure all contracts are meeting the necessary internal compliance requirements.

What is a standardized contract? Examples + when to use