What is a severability clause?
A severability clause keeps the rest of a contract enforceable if one provision is found invalid or unenforceable.
A severability clause keeps the rest of a contract valid if one part is struck down.
Where the word "Severability" comes from
Severability clauses grew from the courts' willingness to separate valid terms from invalid ones rather than voiding entire agreements. A well-drafted clause instructs the court to strike only the offending provision and preserve the rest, protecting the deal from collapse.
Why Severability matters
It protects the parties' bargain when a single term is struck down, such as an overbroad non-compete or an unlawful interest rate. Without it, an entire contract could fail because of one bad clause, undoing the whole transaction.
Common confusion about Severability
Severability is not automatic. Courts can sever invalid provisions even without a clause in some cases, but a clause makes the intent explicit and reduces litigation, so its presence or absence materially affects the outcome.
A real-world example of Severability
A franchise agreement includes a non-compete that is too broad under state law, and a court strikes it. Because the contract has a severability clause, the rest of the franchise deal remains binding, and only the non-compete is removed.
A worked example of Severability
An employment agreement contains a liquidated damages clause that a court finds to be a penalty, and a severability clause. The court strikes the penalty clause but keeps the salary, confidentiality, and ownership terms intact. Without the clause, the employer could argue the entire agreement fails, forcing the parties to negotiate an entirely new deal, which is exactly what the clause prevents.
How Severability works in practice
Include a severability clause in any multi-term contract, and draft it to say that if any provision is invalid, the remainder survives and the invalid term is reformed to the closest valid meaning. When negotiating, ask whether the clause allows the court to rewrite the term or only strike it, because reformation language gives the contract more resilience. Review non-compete and penalty clauses carefully, since they are the most likely to be severed.
Questions about Severability
Is severability automatic?
Only if the clause exists or the court chooses to sever.
What if the bad part is central?
Then the court may still void the whole contract.
Why include it?
To protect the deal if one term is unenforceable.