In the world of business and law, a severability clause is a clause in an agreement or contract that stipulates that if any portion of the document or section of it is unenforceable or deemed invalid or illegal, the remainder of the contract shall remain in effect and continue to be enforced by the parties. In other words, it serves to separate the enforceable and invalid portions of the agreement.
Severability clauses are often used when business owners draft contracts to ensure that if a portion of the contract becomes void, illegal, or in conflict with any applicable federal or state laws, the remainder of the contract will remain binding on the parties. This ensures that parties to the agreement can still carry out their legal obligations despite a portion of the contract being unenforceable.
For example, a severability clause may state that if any part of the agreement is found to be void or unenforceable, such part shall be severed and all other parts shall remain in full force and effect. Thus, the parties to the agreement would still be obliged to fulfil their remaining obligations, even if a portion of the contract has been declared invalid.
What Are the Benefits of a Severability Clause?
A severability clause provides maximum protection to both parties to any agreement. It ensures that a contract continues to stand, even if a part of it becomes void, illegal, or unenforceable. That way, both parties can still honour their legal obligations and avoid potential legal disputes.
A severability clause also helps protect parties if the applicable law or the public policy of a jurisdiction changes after a contract has been signed. In such cases, the clause may be invoked to sever any obligations that have been impacted by the change in laws or public policy.
Final Thoughts
Severability clauses are an important and useful tool for businesses as they provide maximum protection and allow parties to continue to fulfill their obligations, even if a portion of the agreement becomes void or illegal. With such a clause included in any agreement or contract, business owners can rest assured that their interests will be well taken care of.