Severable provisions: Overview, definition, and example
What are severable provisions?
Severable provisions refer to clauses or terms within a contract that are independent of one another, meaning that if one provision is found to be unenforceable or invalid, the rest of the contract or agreement remains valid and enforceable. Severable provisions allow for certain parts of an agreement to be removed or adjusted without affecting the integrity or enforceability of the remaining parts of the contract.
In other words, if a specific provision is determined to be illegal, contradictory, or unenforceable, it can be "severed" from the contract, and the rest of the contract will still stand. This ensures that the contract as a whole does not become void due to one problematic clause.
Why are severable provisions important?
Severable provisions are important because they protect the overall validity of a contract. Without this flexibility, an unenforceable clause could cause the entire contract to fail, potentially leading to confusion, delays, or disputes. By including severable provisions, the parties to the contract can avoid the risk of having to renegotiate the entire agreement if only a specific part is problematic.
For businesses, including severable provisions in contracts ensures that they can continue to operate under the terms of the agreement even if certain clauses need to be removed or altered. For individuals, this clause provides reassurance that their contract rights will not be entirely jeopardized by a single issue.
Understanding severable provisions through an example
Imagine two companies entering into a partnership agreement. The agreement includes provisions regarding intellectual property rights, payment terms, dispute resolution, and confidentiality.
If the confidentiality clause in the contract is later found to be unenforceable (for example, because it is too broad or violates local laws), the contract may still be valid, and the rest of the provisions, such as payment terms or intellectual property rights, will remain intact because the confidentiality clause is severable.
In another example, a franchise agreement might contain a clause specifying the location of the business. If that clause is found to violate zoning laws and is declared unenforceable, the rest of the franchise agreement—such as operational guidelines or royalty payments—remains in force because the location clause is severable from the rest of the contract.
An example of a severable provisions clause
Here’s how a severable provisions clause might appear in a contract:
“If any provision of this Agreement is determined to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remainder of the Agreement shall remain in full force and effect, and the invalid or unenforceable provision shall be deemed severed from the Agreement. The parties agree to substitute a valid provision that most closely reflects the intent of the severed provision.”
Conclusion
Severable provisions are an essential part of contract law that ensure the enforceability of a contract even if some clauses are deemed unenforceable. By allowing specific provisions to be removed or amended without voiding the entire agreement, severability clauses provide flexibility and help maintain the integrity of the contract.
For businesses and individuals, this concept provides a safeguard against the collapse of an entire agreement due to a single problematic provision, allowing contracts to remain functional and effective.
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.