Severability clause: Overview, definition, and example
What is a severability clause?
A severability clause is a provision in a contract that ensures the rest of the agreement remains enforceable even if one or more parts of it are found to be invalid, illegal, or unenforceable. Essentially, if a court determines that a specific term or condition of the contract is void or unenforceable, the severability clause allows the remaining provisions of the contract to stay intact and continue to be effective. This clause is used to prevent an entire agreement from being voided due to one problematic provision.
The severability clause typically includes language stating that if any part of the agreement is declared invalid, the parties intend for the remainder of the contract to still apply to the fullest extent possible.
Why is a severability clause important?
A severability clause is important because it helps preserve the integrity and enforceability of a contract in case one provision is found to be invalid. Without this clause, if a court strikes down one part of a contract, it could potentially invalidate the entire agreement, even if the rest of the contract is perfectly valid and enforceable.
For businesses, having a severability clause ensures that they don’t lose the benefit of the contract if one part is challenged or deemed unenforceable. It helps mitigate risks and ensures that the parties can continue to rely on the valid portions of the agreement, even in the event of unforeseen issues with specific provisions.
Understanding severability clause through an example
Imagine a software company enters into a licensing agreement with a client. The agreement contains a provision that limits the client’s ability to reverse-engineer the software. However, a court rules that this restriction is unenforceable under local law. Without a severability clause, the entire licensing agreement could potentially be rendered invalid. However, with the severability clause in place, the rest of the agreement would still be valid, and the parties could continue to enforce other terms of the contract, such as payment terms and support obligations.
In another example, a company signs a service contract with a vendor that includes several specific delivery timelines. If one of the delivery dates is deemed unreasonable or unenforceable by the court, the severability clause would allow the rest of the contract to remain valid and enforceable, without invalidating the entire agreement.
An example of a severability clause
Here’s how a severability clause might look in a contract:
“If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remaining provisions shall remain in full force and effect. The Parties agree that they would have entered into this Agreement with the unenforceable provision modified to the extent necessary to make it enforceable, without affecting the validity or enforceability of the other provisions.”
Conclusion
A severability clause is a crucial part of many contracts, helping to ensure that the contract remains effective and enforceable even if one part is found to be invalid. It reduces the risk of an entire agreement being voided due to a single unenforceable provision and provides clarity for the parties on how to proceed in the event of legal challenges. By including a severability clause, businesses can protect the integrity of their contracts and maintain enforceability in the face of unforeseen legal issues.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.