- A typical severability clause states that if any provision of the contract is found to be invalid, illegal, or unenforceable, that finding does not affect the validity of the remaining…
- Ontario courts do have general legal doctrines that can, in some circumstances, sever an unenforceable term and preserve the rest of a contract even without an express clause.
- Severability clauses matter most where a contract contains provisions that carry a real risk of being found unenforceable if challenged: - Restrictive covenants — non-compete and…
Contracts are long, and long contracts sometimes contain a clause that a court later decides went too far — a non-compete that is broader than necessary, a limitation of liability that conflicts with a statute, a term that turns out to be unenforceable for some other reason. The question that follows is important: does the rest of the contract survive, or does one bad clause take the whole agreement down with it? That is exactly what a severability clause is written to answer.
This article explains what a severability clause does, why courts do not automatically save the rest of a contract without one, and what to check when you are reviewing this clause in an Ontario agreement.
What a Severability Clause Says
A typical severability clause states that if any provision of the contract is found to be invalid, illegal, or unenforceable, that finding does not affect the validity of the remaining provisions — the rest of the contract continues in force as if the offending clause had never been included, or is read down to the narrowest enforceable version of itself.
The clause usually does two things at once:
- Protects the rest of the agreement from being invalidated because of one problematic term.
- Sometimes gives the court instructions on how to handle the bad clause — cut it out entirely, or modify it (often called "reading down" or a "blue pencil" approach) to the closest enforceable version.
Why This Is Not Automatic Without the Clause
Ontario courts do have general legal doctrines that can, in some circumstances, sever an unenforceable term and preserve the rest of a contract even without an express clause. But relying on that default is a gamble for several reasons:
- Courts look at whether the unenforceable term is central to the deal. If a court decides the invalid clause was fundamental to what the parties bargained for, it may find the whole contract fails rather than attempt to save part of it.
- Without express instructions, courts have less certainty about what the parties intended if a term had to be removed — did they want the rest to survive on its own terms, or would they never have agreed to the deal without that clause?
- The outcome becomes fact-specific and unpredictable in a way that a clear severability clause is designed to avoid.
A written severability clause replaces this uncertainty with the parties' own stated intention, which courts generally respect.
Where This Matters Most
Severability clauses matter most where a contract contains provisions that carry a real risk of being found unenforceable if challenged:
- Restrictive covenants — non-compete and non-solicitation clauses are a classic example, since Ontario courts scrutinize their scope (geography, duration, activities covered) and will sometimes strike an overly broad one down entirely.
- Limitation of liability and indemnity clauses that may conflict with specific statutory protections in certain kinds of contracts.
- Arbitration and dispute-resolution clauses that might be challenged on procedural grounds.
- Any clause drafted broadly "to be safe," where the drafter accepts some risk of overreach in exchange for maximum protection if it holds up.
Severability vs. "Reading Down": A Quick Comparison
| Approach | What happens to the bad clause | What happens to the rest of the contract |
|---|---|---|
| Severability (clause deleted) | Removed entirely, treated as if never written | Remaining terms continue as written |
| "Blue pencil" / reading down | Narrowed to the most restrictive version a court will enforce | Remaining terms continue, often alongside the modified clause |
| No severability clause, court applies general principles | Outcome depends on whether the term is fundamental to the deal | May survive in part, or the whole agreement may be found unenforceable |
Not every court will apply a "blue pencil" approach even where the contract asks for it — Ontario courts have sometimes declined to rewrite an overly broad restrictive covenant into a narrower one, on the basis that doing so would let a drafter write an unreasonably broad clause with no real downside. This is a nuanced, fact-specific area, and it is one of the reasons a severability clause is a helpful backstop rather than a guarantee.
Checklist: Reviewing a Severability Clause
- [ ] Does the clause say the rest of the contract survives if one provision is struck?
- [ ] Does it give the court (or the parties) authority to modify an unenforceable clause to the nearest valid version, rather than just deleting it?
- [ ] Does it address what happens if the unenforceable clause was central to the deal's economics (for example, a core payment term)?
- [ ] Is the clause consistent with how the rest of the contract is drafted — a severability clause cannot rescue a contract that is unenforceable as a whole for an unrelated reason (such as illegality of the entire purpose of the agreement)?
Frequently asked questions
Does a severability clause guarantee the rest of my contract will survive if one part is struck down?
No. It significantly improves the odds and gives a court clear direction, but it is not an absolute guarantee — particularly if the invalid clause was central to the whole bargain, or if the entire contract is found unenforceable for a reason unrelated to that one clause.
Is a severability clause the same as a "savings clause"?
The terms are often used interchangeably, though "savings clause" is sometimes used more broadly to describe any provision meant to preserve part of an agreement if another part fails. In most Ontario commercial contracts, you will see "severability" as the heading.
Why would a drafter include an overly broad clause if severability might not save it?
Sometimes it is genuine overreach by inexperienced drafting. Other times, a party deliberately drafts broadly, betting that a court might narrow it (or that the other side never challenges it) rather than strike it entirely — a strategy that carries real risk, since Ontario courts have shown they are willing to strike down an unreasonably broad restrictive covenant rather than rewrite it.
Should every Ontario business contract have a severability clause?
It is standard, low-cost, boilerplate language that provides real protection in almost every kind of commercial agreement, so there is rarely a good reason to leave it out. The more important question is usually not whether to include it, but whether the rest of the contract's riskier clauses are drafted narrowly enough not to need rescuing in the first place.
This is a corporate question
Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.