Drafting ironclad or airtight business contracts is crucial for the protection of those trying to make business operations predictable. Contracts signed with employees, service providers, clients and other parties need to be clear and enforceable.
The right language in a contract can clarify the obligations that each party has to the other. Appropriate inclusions in contracts can also protect the parties involved should a dispute about the contract eventually arise.
In addition to clauses outlining expectations and obligations, there are often many special clauses added to a contract to establish when the contract is enforceable. Severability clauses are often important inclusions in contracts with specific obligations imposed on either party.
What is a severability clause?
At its most basic, a severability clause serves to help increase the scenarios in which the contract remains valid and enforceable. Such clauses often include language that makes the rest of the contract enforceable even if a breach of one aspect of the contract occurs or the law changes to invalidate part of the contract.
Severability clauses may also include language allowing either party to correct or change the terms of a clause that become unenforceable or impossible to meet. For example, in a lease, a severability clause makes the overall agreement enforceable even if there are certain issues with the premises or a history of delayed payments. The lease does not simply end because the tenant fails to make on-time payments.
How do severability clauses help businesses?
There are many ways in which a severability clause protects a business. Should a delay in delivery or project completion occur, severability clauses allow for the adjustment of terms so that the contract remains valid.
They can also allow a business to enforce an agreement even if a minor breach has previously occurred. The ability to make reasonable adjustments to the agreement to reflect changing circumstances is also quite valuable. A severability clause is one of many important additions that can strengthen business contracts.
Including the right terms in business contracts and drafting custom agreements for each new major business undertaking can be worthwhile investments. Seeking legal guidance can help business owners and executives as they review existing agreements and customize contracts to better suit company needs.
