Courts Can Uphold an Agreement That Is Partly Legal and Partly Illegal

Courts Can Uphold an Agreement That Is Partly Legal and Partly Illegal

The law is generally assumed to be black and white. Something is either legal or it`s not. But in fact, the law can be shades of gray, particularly when it comes to contracts and agreements that involve both legal and illegal elements.

Some contracts may contain both enforceable and unenforceable provisions. For example, an employment contract may contain a non-compete clause that is too broad and therefore illegal, but the rest of the contract is valid. Or, a contract may be valid but only in part, such as a contract that includes a provision that is in violation of a state`s consumer protection laws.

So what happens when a court is asked to enforce a contract or agreement that contains both legal and illegal provisions? In many cases, courts will apply a principle known as “severability” or “blue penciling.” This means that the court will separate the legal and illegal parts of the agreement, and enforce only the legal parts.

The goal of severability is to prevent an illegal provision from infecting the entire agreement and rendering it unenforceable. Instead of throwing out the entire contract, the court will strike the illegal provisions and enforce the rest. This allows parties to still benefit from the legal aspects of the contract, while ensuring that illegal provisions do not go unchecked.

It`s worth noting that not all contracts or agreements are subject to severability. Certain types of contracts, such as contracts that are illegal in their entirety (such as contracts to commit a crime), cannot be severed.

So, what should you do if you are negotiating a contract or agreement that contains both legal and illegal provisions? First, it`s important to work with an experienced attorney who can advise you on the risks and benefits of including certain terms and provisions. And, if your contract or agreement is subject to severability, be prepared for the possibility that certain provisions may be struck down. But remember, severability is designed to protect the legal aspects of your agreement, so it`s still possible to come out ahead in the end.

In conclusion, courts can uphold agreements that are partly legal and partly illegal through the principle of severability. The legal parts of the agreement are enforced while the illegal parts are struck down. It`s important to be aware of this principle when negotiating and drafting contracts and agreements to ensure that you get the most out of your relationship while staying compliant with the law.