What is a severability clause? This is one of the more common questions I get, especially from those new to small business. That’s not a bad thing! This is boilerplate. It sounds relatively meaningless, but does actually carry a lot of meaning. On the other hand, lawyers rarely read these because they all tend to say the same thing.
Basically, they’re going to say that if any portion of the contract is found invalid or unenforceable, the rest of the contract will still carry on as if that bad portion was removed. There can be a lot of variation here if the clauses that are questionable are very important. For example, a nondisclosure provision might be so important that the contract would be irrelevant without it.
Severability Clause Examples
We have several examples of severability clauses in our other blog. However, here is a simple example:
If any provision of this Agreement, or any portion thereof, is held to be invalid and unenforceable, then the remainder of this Agreement shall nevertheless remain in full force and effect.
For the most part, judges will only define the terms of a contract by what is written within the “four walls” of the contract. If a contract has an unenforceable provision, the judge has two options: throw out the whole contract, or remove that provision. In North Carolina, judges generally will not redefine the contract. Therefore, if you don’t give them instructions, who knows what will happen. This simple clause eliminates the ambiguity. List most boilerplate, there’s a reason it is there.
In some more advanced severability clauses, your lawyer likely provides backups for important provisions. Take our nondisclosure provision again. If it is invalid, you still need it. Since the court cannot redefine it, your lawyer should have multiple options. If a two year restriction is too much, your lawyer should have a one year replacement ready to go. That provision would say something like “If the time restriction found in Section B is found unenforceable, that restriction shall be replaced with one year instead”. If done right, judges enforce that.
This is probably more information than you needed. However, severability clauses are useful. And, we always appreciate our friends and clients knowing more about what they’re signing. Hopefully this will help you be a more informed person going forward.
If you have any need to review or modify your severability clause, please feel free to reach out to us at firstname.lastname@example.org or by calling 919-912-9640.