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by hkhanna 1073 days ago
I think a good middle ground solution would be to prohibit “severance” clauses as a matter of public policy in Terms of Service.

Severance clauses say that if any part of the terms are struck down for any reason, the rest of the agreement stays in effect.

By banning severance clauses, companies would be forced to provide reasonable terms. Because if they put anything unconscionable anywhere in the agreement, the entire agreement will be struck down on the grounds of unconscionability.

1 comments

Before severence clauses there were no severence clauses. Somewhere along the line severence clauses became necessary. It would be wise to thoroughly determine why that particular fence was erected before tearing it down -- which includes not just hand-waving it away as assuming it was erected in malice. Maybe it needs to be repaired or reinforced, or maybe gates need to be added to accommodate new usage. Maybe it indeed needs to be torn down.
I've drafted many severance clauses in my career to avoid the common law default of "the contract stands or falls together." They are put there by lawyers, usually for good reason when you have two represented parties negotiating at arms length. I am not suggesting doing away with that.

But when terms are imposed on someone who is never represented by counsel when accepting them, I cannot see even a theoretical reason to not void them, especially when another part of the contract is struck down for unconscionability.

I stand behind my proposal, but I'll re-frame it: severance clauses should be unenforceable against an unrepresented party when any part of the contract was struck down on the grounds of unconscionability.

This policy, which I promise I have considered in some detail over the last decade, would go a long way to making contracts between parties of uneven bargaining power more fair overall.