Do you need a severability clause?

| Jan 20, 2022 | Business Litigation |

Business owners of many sorts like you will likely have to create a contract at some point in time. You may need one for hiring a new employee, buying new businesses or securing the services of professionals.

Though contracts can differ greatly in purpose and complexity, all contracts should have certain shared aspects which serve as key components. A severability clause serves as one of these important features.

How do provisions end up bad?

The U.S. News & World Report discusses severability clauses and their place in a contract. A severability clause essentially prevents the rest of the contract from needing to get thrown out or scrapped just because of one bad provision.

A bad provision in contract terms can refer to a number of circumstances. For one, a provision might end up unenforceable due to local laws. If the provision does not have clear and concise language, it might also end up too open for interpretation, leading to misunderstandings with the other parties involved. Sometimes, especially due to changing situations, provisions might even end up rendered impossible.

Deciding how to handle bad provisions

In dealing with such provisions, you can include a clause that will determine how you will handle bad provisions. You can state what you will allow to undergo changes or modifications, as well as discuss the methods for doing so, such as through arbitration or mediation.

If the provision does not impact the rest of the contract, then you can set it up so the rest of the contract stays intact even after handling said provision. Unfortunately, if the provision impacts the whole contract, it may end up nullified regardless.

It can help to have legal aid on your side when going through this process, too. They can ensure you stay within your legal bounds and prevent costly mistakes.

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