Key Takeaways

  • A severability clause ensures that if one part of a contract is found invalid or unenforceable, the remainder of the contract remains in effect.
  • Severability clauses protect the integrity of agreements and reduce the risk that an entire contract becomes void due to a single problematic provision.
  • Well-drafted severability clauses often include language about modifying or removing unenforceable terms to preserve the agreement’s intent.
  • Courts may apply the concept of severability even if a contract does not include a clause, but outcomes can be unpredictable, especially when essential terms are at issue.
  • Practical examples and tips can help you draft a robust severability clause tailored to your contract’s unique needs.

A contract severability clause outlines what would happen if parts of a contract are deemed unenforceable. When writing a contract severability clause, you should write it with the intention to save the agreement and to outline the essential parts of the agreement. Your severability clause should address what to do when there is an unenforceable clause in your contract and what should happen when the provision is essential to the contract's intent.

What is a Contract Severability Clause?

When you have an unenforceable clause, either rewrite the unenforceable clause so that it is valid (Rule of Reasonableness), or revise the invalid clause so that it is enforceable. If the clause addresses the “essential purpose” of the agreement, then the entire contract should be invalid. Your severability clause should address what to do in either situation.

All severability clauses usually contain two parts:

  1. The first parts, the savings language, address how to preserve the rest of the contract even if the court finds a part unenforceable.
  2. The second part, the reformation language outlines how the parties will address the unenforceable parts. They will either be modified so that they will be enforceable or deleted.

Although you should include a severability clause in a contract, some courts apply the concept while some may not. Still, if the unenforceable part of the agreement is essential, not even the courts can do anything about it. More than likely, the entire contract is voided.

How Severability Clauses Work in Practice

A severability clause typically states that if any provision of a contract is held invalid or unenforceable by a court, the remaining provisions will remain effective. This ensures that the contract's overall intent and functionality are preserved, rather than the entire agreement being jeopardized by one problematic section. For example, a severability clause might read:"If any provision of this Agreement is found to be invalid or unenforceable, such invalidity or unenforceability shall not affect the remaining provisions, which will continue in full force and effect."

In practice, the clause serves as a safety net, providing assurance to both parties that the contract will not be wholly undone by a single issue. However, if the invalid provision is so central that it goes to the heart of the agreement, the entire contract may still be voided, regardless of the severability language.

Examples of Severability Clauses

Severability clauses are common in a variety of contracts, from commercial agreements to employment contracts. Here are some sample clauses:

  • Basic Severability Clause:
    "If any provision of this Agreement shall be held or made invalid by a court decision, statute, or rule, or shall be otherwise rendered invalid, the remainder of this Agreement shall not be affected thereby."
  • Severability with Reformation Language:
    "If any provision of this Agreement is determined to be invalid or unenforceable, such provision will be reformed to the minimum extent necessary to make it enforceable, and the remainder of the Agreement will remain in effect."

You can view additional examples in publicly filed contracts, such as those available in SEC filings and on contract clause databases, which often show the variations and customization of these clauses to suit specific agreements.

Drafting a Better Severability Clause

If you do not have a severability clause in your contract, the law usually provides a backup provision when part of the agreement fails. However, if there are no laws that address the term in question and the condition is critical to the agreement, then the court may void the entire agreement. Therefore a severability clause is essential when:

  • The law does not have a default rule applicable to the unenforceable clause.
  • The invalidated term is central to the contract's purpose.

When you draft the severability clause to modify the contract, It also should address what happens if the entire contract is invalid. If the agreement is unenforceable there should be an economic adjustment clause where the party adversely impacted is compensated to make up for the financial loss. The economic adjustment would not be considered, however, if there were egregious misconduct.

Why Severability Clauses Are Important

Including a severability clause in your contract can help prevent costly litigation and uncertainty if part of the agreement is challenged in court. Key benefits include:

  • Risk Mitigation: Reduces the risk that the entire contract will fail due to a single invalid clause.
  • Flexibility: Allows courts or arbitrators to modify problematic terms rather than voiding the contract.
  • Preserves Intent: Helps ensure that the parties’ original intent is honored, even if one provision cannot be enforced.
  • Reduces Disruption: Keeps business relationships and contractual arrangements intact in the face of legal challenges.

Ultimately, a well-drafted severability clause acts as a safeguard, maintaining the stability of the agreement and minimizing disruption for both parties.

Some Tips in Drafting a Severability Clause

When drafting a severability clause consider the following:

  • Include verbiage in the clause that allows the parties to the agreement to adjust the term to make the clause in question enforceable. Furthermore, you can let the judge or arbitrator amend the clause as well.
  • Make sure the severability clause communicates the essential terms of the contract and what do do when those terms are unenforceable.

Common Pitfalls and Best Practices

When creating a severability clause, watch out for these common pitfalls:

  • Overly Broad Language: Avoid language that could allow essential terms to be severed. Be specific about which provisions are fundamental to the contract's purpose.
  • Contradictory Provisions: Ensure the severability clause does not conflict with other terms in the agreement or undermine the parties’ core intentions.
  • Failure to Address Remedies: Specify what happens if a key provision is invalidated—should the parties renegotiate, or should the contract terminate?
  • Boilerplate Reliance: Avoid relying solely on standard “boilerplate” language without tailoring the clause to your specific contract.

Best Practices:

  • Review each contract to identify terms essential to its intent and specify them in the clause.
  • Consider adding language about judicial reformation—permitting a court to modify an invalid term to make it enforceable.
  • Consult legal counsel to ensure the clause fits the contract’s unique needs and complies with relevant laws and regulations.

Boilerplate Blunders: A Reminder That “Standard” Contractual Provisions Should Be Used With Care

Boilerplate provisions are often viewed as a legal language that is steadfast, iron-clad and fluid enough to work in any type of agreement. A common standard clause you have in a contract is the following: “Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party without the prior written consent of the other Part.” A boilerplate provision as the one above may contradict or confuse other parts of the agreement. When using standard provisions in your contract severability clause:

  • Make sure you don't duplicate the effort or conflict the efforts with other clauses you might want to add.
  • Use boilerplate clause for clarification by keeping your intent in mine.

Contract severability clauses are meant to clarify the intent of the agreement and to deal with circumstances that can derail it. Make sure you address how you will deal with a contract with an unenforceable clause as well as when that clause is essential to the agreement. Boilerplate provisions can help you if they are used to clarify and complement other boilerplates in the contract. When used correctly, it helps determine what to when there is an unenforceable statement in your contract. Seek help from your legal counsel to ensure your severability clause support the agreement's intent.

Severability Clause FAQs and Real-World Considerations

Severability clauses are not one-size-fits-all. Their effectiveness can depend on jurisdiction, the specific language used, and the overall structure of the agreement. Here are some real-world considerations:

  • Jurisdictional Differences: Some courts may apply their own severability rules even if a contract lacks a clause, while others will strictly interpret the parties' intent as expressed in the contract.
  • Entire Agreement Clauses: Severability clauses often work alongside "entire agreement" provisions to clarify the parties’ intentions and reduce the risk of disputes.
  • Negotiation Leverage: In contract negotiations, a well-crafted severability clause can provide leverage and clarity for both parties, helping avoid future conflicts.

Frequently Asked Questions

1. What is a severability clause in a contract?

A severability clause states that if any part of a contract is found invalid or unenforceable, the rest of the contract remains effective.

2. Why should I include a severability clause in my contract?

It protects your agreement from being entirely voided if one provision is found unenforceable, preserving the overall intent.

3. Are severability clauses always enforced by courts?

Not always—courts may disregard the clause if the invalid provision is essential to the agreement or if local laws differ.

4. Can a severability clause be customized for different contracts?

Yes, you can tailor the language to suit the specific nature and needs of your agreement, including remedies and reformation.

5. Where can I find examples of severability clauses?

Examples are available in public contract databases and on legal information sites, or you can consult an attorney for sample language.

If you need help drafting a severability clause for your contract, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.