This form provides boilerplate contract clauses that outline the level of severability applicable to the terms of the contract agreement and establishing procedures for the possibility that any part of the agreement may be found by a court to be unenforceable. Several different language options representing various levels of severability and various procedures to follow in such an eventuality are included to suit individual needs and circumstances.
Montana Negotiating and Drafting the Severability Provision
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FAQ
The purpose of a severability clause is to preserve the remaining, valid parts of a contract. Doing so reinforces the seriousness of entering into a written agreement while ensuring that other parties are not damaged when dealing with a severability issue.
A severability clause provides that the invalidity of one contractual provision does not render the entire contract void. In other words, parties will place a severability clause into their contract in order to prevent the invalidity of the entire contract where one term has been deemed void.
For example, if Mr. X purchases a computer, a scanner, a printer and a desk from a retailer, and the retailer cannot deliver the printer, the other parts of the contract (the computer, the scanner and the desk) are still valid and must be honored.
If any provision of this Agreement is held to be illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions hereof, but such provision shall be fully severable and this Agreement shall be construed and enforced as if the illegal or invalid provision had never been included ...
A severability clause in a contract states that its terms are independent of one another so that the rest of the contract will remain in force should a court declare one or more of its provisions void or unenforceable.
When you hear the term FULL severability, it means that a policy provision provides that no insured's knowledge or misrepresentations will be imputed an another insured; and this is what you want in your D&O policy.
Severability is a drafting concept that allows the remainder of a contract's terms to remain effective, even if one or more of its clauses is found to be unenforceable or illegal. Unenforceable clauses may be severed from other parts of the contract, without rendering the entire contract unenforceable.
13. SEVERABILITY. If any section, subsection, subdivision, sentence, clause, or phrase of this Article is for any reason held to be invalid or unconstitutional by decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Article.
