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transnational law transnational law (lex mercatoria or international business law) and "Severability of contract provisions" 2016-03-01 13:58:16 https://www.trans-lex.org/img/logo_ball.png
Principle

No. IV.7.5 – Severability of contract provisions

(a) Unless otherwise agreed by the parties or prohibited by law, each of the provisions of a contract is severable and distinct from the others.

(b) If at any time during the existence of the contract one of its provisions, which is severable and distinct from the others pursuant to Subsection (a), is determined to be or to have become invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of the contract shall not in any way be affected or impaired.

(c) The parties shall negotiate in good faith pursuant to Principle IV.6.7 to replace such invalid, illegal or unenforceable provision with a valid, legal and enforceable provision the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.
Commentary
1 Pursuant to Subsection (a) the provisions contained in a contract are independent of each other. As a consequence of this independence, Subsection (b) stipulates that the invalidity, illegality or unenforceability of one of those provisions does not "infect" the remainder of the contract. The policy behind that rule is the presumed intention of the parties to international business contracts to avoid termination or invalidity of their contract, i.e. to uphold the contract’s validity as much as possible. That policy also underlies Principle IV.5.3. which relates to the interpretation of international business contracts. 

2 Pursuant to the fundamental Principle IV.1.1 (party autonomy), the parties may always provide that their contract shall “stand and fall” with a certain contract provision, for example because that provision is of paramount importance for the commercial purpose which the parties pursue with the conclusion of the contract so that the contract shall not survive the invalidity of that provision. Even if the contract does not contain an express stipulation to that effect, such tacit intention may be derived through interpretation of the contract. However, in that latter scenario the rule contained in Principle IV.5.3 - which strongly favors the validity of the contract - requires clear and unambiguous indications for that common intention in the contract. Also, mandatory law may require that the invalidity, illegality or unenforceability of a certain contract provision affects the contract as a whole. 

3 The invalidity of a key provision of the contract may result in an exchange materially different from the bargain initially struck by the parties if the contract remains valid pursuant to Subsection (a). For that reason, Subsection (c) imposes on the parties a duty to renegotiate an economic adjustment of their bargain pursuant to Principle IV.6.7. In such a scenario, the party whose position under the contract is materially and adversely affected by the upholding of the contract without the invalid clause may demand from the other side to enter into negotiations with the aim of replacing the invalid, illegal or unenforceable provision with a valid, legal and enforceable contract clause the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision. If the parties do not succeed in negotiating a substitute clause which meets the economic requirements of Subsection (c), the claim for modification may be brought before a court or international arbitral tribunal, provided that the procedural law of the court (lex fori) or the arbitration law at the seat of the arbitration (lex arbitri) allows for such creative decision-making by the court or arbitral tribunal.  

4 Subsection (c) is subject to the general Principle of good faith (Principle I.1.1). A party may therefore not claim renegotiation pursuant to Subsection (c) if the invalidity, illegality or unenforceability of the clause is due to its own serious misconduct or fault.

5 For arbitration clauses that are contained in a contract, Principle XIII.2.4 contains the reverse rule: the invalidity of the contract does not automatically affect the validity of the arbitration clause, i.e. the arbitrators have jurisdiction to decide on the invalidity of the contract even though the contract is void or invalid. If, however, the contract is void ab initio, that invalid will usually also affect the arbitration clause contained therein.





Please cite as: "Commentary to Trans-Lex Principle , "
References
Court Decisions
Contract Clauses
Principle of Severability
Misc.
Severability

If any provision of the Plan is held invalid or illegal for any reason, any illegality or invalidity shall not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had never been contained therein. The Company shall have the privilege and opportunity to correct and remedy such questions of illegality or invalidity by amendment


2000
Severability

If any provision of the Plan and Trust is or becomes invalid or otherwise uenforceable, that fact shall not affect the validity or enforceability of any other provision of the Plan and Trust.


2000
Severability

If any provision of the Plan, ort he application thereof to amy individual or circumstance, is deemed invalid or unenforceable by a court of competent jurisdiction, then the remainder of the Plan, or the application of such term or provision to individuals or circumstances other than those as to whom it is held invalid or unenforceable, shall not be affected thereby, and each provision of the Plan shall be valid and enforceable to the fullest extent permitted by law.


2000
Severability

The invalidity of any particular clause, provision or covenant herein shall not invalidate all or any part of the remainder of this Plan, but such remainder shall be and remain valid in all respects as fully as the law will permit.


2000
Severability

If individual terms of a purchase order placed on the basis of these Purchase Conditions are invalid or unenforceable this shall be without prejudice to the validity of other terms. In such event the parties shall replace the invalid or unenforceable term by a valid and enforceable term which will meet the pur- pose of the invalid or unenforceable term as closely as possible


2000
Severability

If any provision of this Note is held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Note are not affected or impaired in any way and Parent and Stockholder Representative agree to negotiate in good faith to replace such invalid, illegal and unenforceable provision with a valid, legal and enforceable provision, that achieves, to the greatest lawful extent under this Note, the economic, business and other purposes of such invalid, illegal or unenforceable provision.


2000
Severance

If any provisions of this Agreement shall be invalid or unenforceable, the remaining provisions shall continue to be fully effective.


2007
Severability

Every provision of this Note is intended to be severable. In the event any term or provision hereof is declared by a court of competent jurisdiction to be illegal or invalid for any reason whatsoever, such illegal or invalid term or provision shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable.


2010
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