What is a severability clause?

On Behalf of | Jan 13, 2021 | Business Litigation |

Whether you are buying a new business, hiring a worker, or securing professional services, contracts are crucial. Some contracts are simple and straightforward, while others are far more complex.

Regardless of their purpose or complexity, most contracts should have a severability clause. According to U.S. News & World Report, severability clauses prevent an entire contract from being rendered null and void due to one bad provision. Here are a few reasons why your contracts should include this essential feature.

Why certain provisions may be unenforceable

Provisions may be considered unenforceable for many reasons. In some cases, it may violate an existing law. This highlights why getting the help of an attorney is recommended during the drafting phase. The provision may also lack details, which can leave it open for interpretation. Clear, concise language is best in contracts, so all parties know exactly what they are signing up for. A provision may also be considered impossible, which sometimes occurs when situations have changed drastically.

How to ensure your severability clause is sound

While including a severability clause is definitely important, you must also ensure the clause you include in the contract is legally sound. Even if the contract template you are using includes such a clause already, consider creating your own for the biggest impact. To do so, state the provision in question can be modified or changed in such a way that it favors both parties. Also state the method for modifying the provision, such as arbitration or a court hearing.

You can also state that the offending provision is removed, while the rest of the contract remains intact. This option will only work if the provision does not impact the rest of the contract. If it does, it might be determined that the entire contract is unenforceable.

Contracts must protect you as well as other parties entering into a formal agreement. By taking the time and the proper steps to draft a legally binding contract, you will save yourself a lot of hassle down the line.

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