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I've seen in some contracts clauses stating something like

If a term or condition is found to be unenforceable, the rest of the contract still remains in affect.

Is this necessary? Unless specified otherwise, if part of the contract is found unenforceable then would the entire contract be nullified?

For example if a contract states "employees must remain in the building when there is a fire" and it is found this part of unenforceable, would this be grounds for terminating the employee (anyways) because that means the entire employment contract was invalid?

  • If the whole contract is invalid, then there still remains the implied contract: assigning work, paying, etc. All these give evidence to a contract even if the paperwork is missing or non-sense. – ctrl-alt-delor Jan 9 '16 at 11:54
  • @richard if the implied contract still existed wouldn't that mean it's not necessary to add "to extent enforceable by law" assuming that parties were following the contract? – Guy McG Jan 11 '16 at 10:48
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Absolutely it is.

If a contract contains void provisions then, in general, the contract itself is void for uncertainty. A void contract never existed so you couldn't use this to terminate a contract because there never was a contract.

Contracts of employment are typically heavily regulated and the regulations may tell you to deal with void provisions in a different way. However, for common law contracts a void provision can sink the whole thing.

  • What is a common law contract? Would a rental lease be one or is it regulated? – Guy McG Jan 9 '16 at 11:11
  • A common law contract is a contract made in a common law jurisdiction - basically the UK and former British colonies (including the USA ex. Louisiana - a civil law jurisdiction). A rental lease would be a common law contract and be subject to regulation that changes the common law rules. – Dale M Jan 9 '16 at 19:53
  • I have a lease that says $75 will be charged for any bounced checks for rent. I also know that this is unenforceable as the maximum allowable fee in the area is $50. No where on the contract does it say "to the extent enforceable by law". Does this mean the entire addendum is void and I don't have to mow the lawn or follow any of the other requirements in the contract? – Guy McG Jan 11 '16 at 10:51
  • @GuyMcG possibly not, why don't you stop and when they evict you try that in court? Let us know how that goes for you. – Dale M Jan 11 '16 at 19:23
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    Could you give an example of an unenforceable item that would render the entire addendum void? For example would "no black people allowed in the house" be one? – Guy McG Jan 12 '16 at 3:00
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It is necessary for any contract that is complex, interstate, or not drafted by an attorney. A severability or savings clause is critical in those situations, because without it, a contract that has a clause found to be either unenforceable by law, or unenforceable because it is one sided, unfair, unethical or illegal. In those cases, without a savings clause, you will find more often than not, that in times of dispute the entire contract can be found invalid. If you have that clause (the savings clause) you will be able to argue that it was foreseen by the parties that in the event some cause is found to be illegal, unjust, or unenforceable for whatever reason, that the remainder is saved. It protects both parties.

  • Without that clause, how do they decide if the entire contract was invalid? For example, in a tenancy lease, say there were two clauses. 1) tenant must pay $1,000 for any late fees 2) tenant is responsible for cutting the grass. If 1) is found to be unenforceable because the price was too high, would that automatically excuse him from 2) cutting the grass if there was no savings clause? – Guy McG Jan 19 '16 at 2:05
  • No. Most courts will enforce all enforceable terms anyway. However, there is alway the chance that if a contract is overly once sided, or contains too many terms that are unenforceable, that the entire contract will be found void and standard terms replaced. In the situation you describe, it is likely that the state jurisdiction will set a maximum late fee. – gracey209 Jan 21 '16 at 16:26
  • That said, say many terms are unenforceable and the contract is found void in total, because of the lack of a savings clause. This won't ever mean the drafter (if owned something) will be out of luck totally. They will still have a claim in quantum meruit; this will mean that the court will award what is equitable. It is just safer to have the clause, so as to save as many terms as possible the the parties agreed to before hand, rather than the court determining what is just. – gracey209 Jan 21 '16 at 16:29

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