What Is The Blue Pencil Rule?
The blue pencil rule is a principle in contract law that provides for the modification of contracts by the court in certain instances. More specifically it allows certain unenforceable provisions of a contract to be “crossed out” (by the judge’s hypothetical “blue pencil”), leaving the remainder of the contract valid and enforceable.
Why Is The Blue Pencil Rule Important?
Uniformity. The blue pencil rule is a common law principle, and as such it is not enforced the same way in every state. Some states do not modify contracts at all, others do so only with certain provisions, and others require contracts to be modified. When drafting a contract, it is best not to leave it to chance that the contract will be uniformly enforced across every jurisdiction in which it is challenged. Consequently, best practice dictates the inclusion of a provision that deals with this. The blue pencil rule is important because it highlights the often overlooked fact that contracts are not modifiable per se to exclude unenforceable provisions, and could potentially be invalidated by their inclusion.
How Can Business Owners Anticipate This And Stay Ahead Of The Curve?
Great question. Add a severability clause. Something to the effect of “…if any term of this Agreement should be adjudicated to any extent invalid, illegal, or other unenforceable, that term shall be excluded to the extent of such invalidity, illegality, or unenforceability and all other terms contained herein shall remain fully in force…” should suffice. It is particularly important to include a severability clause when the law on a particular subject is uncertain, and even more so when a term anticipated to be at issue is crucial to the transaction.
Got A Question on the Blue Pencil Rule of Severability Clauses?
Attorney Chris Mutchler may be able to help. Get in touch with The Law Office of Christopher J. Mutchler. If we can’t help you, we’re more than happy point you in the direction of someone who can!
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