Agreement Severability Clause: What it is and Why it Matters
When drafting contracts or agreements, it is common for parties involved to include a clause that addresses what happens if a portion of the agreement is found to be invalid or unenforceable. This clause is called an agreement severability clause, also commonly referred to as a severability provision or saving clause.
The purpose of an agreement severability clause is to ensure that if one part of the contract is deemed unenforceable or invalid, the rest of the agreement remains intact. This clause is crucial because it protects the parties from having the entire agreement invalidated if one portion of it is found to be unenforceable.
For example, imagine two parties enter into a contract for the sale of a commercial property. The agreement includes a provision that requires the buyer to pay a penalty if they fail to close the deal within a certain timeframe. If a court were to find this provision to be unreasonable, the agreement severability clause would prevent the entire contract from being invalidated and only this provision would be removed.
Without an agreement severability clause, the invalidation of one provision could lead to the entire agreement being found unenforceable, leaving both parties without protections provided by the contract.
Including an agreement severability clause has other benefits as well. It can save time and money by minimizing the need for costly litigation to invalidate an entire agreement. Additionally, it can also give parties the confidence to enter into a contract knowing that the agreement can survive if one part is found to be invalid.
There are some considerations to keep in mind when drafting an agreement severability clause. The language used in the clause should be clear and unambiguous to ensure the clause accomplishes its intended purpose. Parties should also ensure that the clause covers all provisions of the agreement and that it applies to any portion of the agreement that may be found unenforceable.
In conclusion, an agreement severability clause is an important provision to include in any contract or agreement. It protects parties by ensuring that the remainder of the agreement remains enforceable even if one provision is found to be invalid. While it may seem like a small detail, neglecting to include an agreement severability clause could have significant consequences if an agreement is found to be unenforceable.