Legal Definitions - Severability clause

A severability clause is a common provision found in contracts. Its purpose is to protect the overall agreement by stating that if a court or other authority finds one specific part or condition of the contract to be illegal, invalid, or unenforceable, the rest of the contract will remain fully valid and enforceable. Essentially, it allows the problematic part to be "cut out" or "severed" without destroying the entire agreement.

Here are some examples to illustrate how a severability clause works:

• Employment Contract: Imagine an employment agreement between a company and a new employee. This contract includes various terms, such as salary, job duties, confidentiality obligations, and a non-compete clause preventing the employee from working for a competitor for two years after leaving the company. If a court later rules that the non-compete clause is unreasonably broad (e.g., it covers too wide a geographic area or too long a time period) and therefore unenforceable, the severability clause ensures that the employee's salary, job duties, confidentiality obligations, and all other valid parts of the contract remain in full effect. The employee is still employed under the agreed terms, just without the problematic non-compete restriction.

• Software License Agreement: A company licenses a complex software suite from a vendor. The license agreement contains dozens of clauses covering usage rights, payment terms, intellectual property, and a specific provision about how user data must be stored and processed. If a new data privacy regulation is enacted, and a regulatory body determines that the data storage provision in the license agreement violates this new law, the severability clause would prevent the entire software license from becoming void. Instead, only the non-compliant data storage clause would be invalidated or modified, allowing the company to continue using the software under all other valid terms and conditions, such as payment schedules and usage restrictions.

• Commercial Lease Agreement: A business signs a lease for office space in a building. The lease agreement specifies rent, duration, maintenance responsibilities, and a clause stating that the tenant must exclusively use a particular security company designated by the landlord. If a local government agency later investigates and finds that the exclusive security company clause is an illegal anti-competitive practice, the severability clause in the lease ensures that the tenant still has to pay rent, maintain the property, and abide by all other legitimate terms of the lease. Only the problematic security company requirement would be nullified, leaving the core agreement for the office space intact.