No nation was spared in the recent global downturn, but several countries in the Eurozone arguably took the hardest punch, and they are still down. Doubts about the solvency of Greece, Spain, and a number of their neighbors are increasing the likelihood of a breakup of the common European currency. Observers believe a single departure and sovereign debt default might set off a “bank run” on the euro, with devastating regional and global consequences.

What mechanisms are available to address—or ideally, to prevent—such a disaster?

One unlikely candidate is boilerplate language in the contracts that govern Eurozone sovereign bonds. As suggested by the term “boilerplate,” these are provisions that have not been given a great deal of thought. And yet these clauses—which specify the currency in which the bonds will be paid and the source of law that will govern any dispute stemming from them—have the potential to be a powerful tool in confronting the threat of a global economic conflagration.

But they also have the potential to fan the flames.

Observers currently believe that a departing country could convert its debt obligations to its new currency, thereby rendering its debt burden manageable and staving off default. However, this Article argues that these terms would likely preclude a change in the currency of payment (a “redenomination”). Instead, a court would probably declare an effort at redenomination to be a default.

A default would inflict damage far beyond the immediate parties to the dispute. Not only would it surprise the market, it would be taken to predict the outcome of other struggling countries’ debt obligations, because they are largely governed by the same terms. The possibility of such a result therefore increases the risk that a single nation’s departure from the euro could bring down the currency and trigger a global meltdown.

To address this risk, this Article proposes a new rule of contract interpretation that would allow the redenomination of a sovereign bond under certain circumstances. It also introduces the phrase “boilerplate shock” to describe the potential for standardized contract terms—when they govern the entire market for a given security—to transform an isolated default on a single contract into a threat to the broader economy. Beyond the immediate crisis in the Eurozone, the Article urges scholars, policymakers, and practitioners to address the potential for boilerplate shock to disrupt the global financial system.