The Severability Clause: Ensuring Contractual Validity
The severability clause, also known as the "preservation clause," is a crucial element in contract drafting. It governs the legal consequences when individual parts of a contract prove to be invalid or unenforceable. This clause also addresses situations where a contract fails to regulate issues that should have been covered.
The primary purpose of a severability clause is to uphold the validity of a partially ineffective or unenforceable contract as much as possible. Ultimately, it aims to preserve the economic success that the contract is intended to achieve.
Standard Formulation of a Severability Clause
A typical formulation of a severability clause often appears as follows:
"Should individual provisions of this contract be invalid or unenforceable or become invalid or unenforceable after conclusion of the contract, the validity of the rest of the contract shall remain unaffected. The invalid or unenforceable provision shall be replaced by the valid and enforceable provision whose effects most closely approximate the economic objective pursued by the contracting parties with the invalid or unenforceable provision."
This wording ensures that the core agreement remains intact, even if minor parts are deemed legally problematic.
Severability Clauses in General Terms and Conditions (GTC)
It is important to note that severability clauses in general terms and conditions (GTC) are not always beneficial or even legally sound. Specific regulations apply in different jurisdictions.
Germany
In Germany, for instance, the rule that the invalidity of a clause does not affect the validity of the rest of the contract applies to GTC anyway. Furthermore, a severability clause that attempts to deviate from this statutory provision may itself be invalid.
Austria
In Austria, the same principle generally applies, but primarily for transactions between entrepreneurs. For consumers, a severability clause might violate the transparency requirement if it is not clear and understandable, potentially rendering it void.
Switzerland
In Switzerland, a severability clause is generally superfluous. Its regulatory objective is already covered by law under OR Art. 20 para. 2.
Conclusion
While severability clauses are crucial for maintaining contractual intent and economic goals, their application varies significantly, especially in GTC. Understanding these jurisdictional differences is essential for effective contract drafting and ensuring legal compliance.