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{{a|boilerplate| | {{a|boilerplate| | ||
{{image|Shears|png|Some [[dagging]] shears yesterday, suitable for severing things.}} | {{image|Shears|png|Some [[dagging]] shears yesterday, suitable for severing things.}} | ||
}}{{t|Profound ontological uncertainty}} writ large. If ''one'' aspect of my {{t|contract}} | }}{{t|Profound ontological uncertainty}} writ large. If ''one'' aspect of my {{t|contract}} becomes, through the machinations of the steampunk state, illegal, what does that mean for the ''rest'' of it? | ||
This is really a way of looking at the question of [[illegality]], the general proposition for which is that | This is really a way of looking at the question of [[illegality]], the general proposition for which is that “a {{t|contract}} which obliges its participants to do illegal things is void and unenforceable as a matter of pubic policy.” | ||
So | So, should you hire an assassin to kill your spouse and the assassin takes your money but fails to carry out the job, don’t expect [[Queen’s Bench Division|her majesty’s courts]] to award you any [[damages]], much less the [[Courts of chancery|courts of equity]] to direct [[specific performance]]. | ||
Straightforward enough. But still, hypotheticals fester, at least in the minds of [[ | Straightforward enough. But still, hypotheticals fester, at least in the minds of [[Legal eagle|our learned friends]] the world over. The brethren and sistren of commercial solicitude fixate, as we know, upon divining our possible futures and preparing for all contingencies they might shower upon us, however remote. So, what if only a ''teeny'' little bit of the contract becomes [[Illegality|illegal]]? Or not ''very'' illegal? Not punishable by imprisonment, nor a fine, but just sort of ''gauche''? | ||
If it is just a bish, can the parties still get on with the ''rest'' of it? | |||
And if, otherwise, not, might it help if we say, “in this contract that any bit which later becomes illegal — or even turns out to have been illegal the whole time — just ''doesn’t count'' any more, so we can carry on with all the remaining good bits? | |||
===On crystal balls and unexpected inequities=== | ===On crystal balls and unexpected inequities=== | ||
The [[JC]]’s general concerns about [[boilerplate]] are here writ large. | The [[JC]]’s general concerns about [[boilerplate]] are here writ large. | ||
So, firstly, | So, firstly, that a severability clause is even on the table speaks to some apprehension on the parties’ part as the business they are proposing to do. Doesn’t it? Either that, or a ''misapprehension'': that what they have in mind is, and will stay, legal for the period of time they are proposing to do it. | ||
Second, even if their enterprise was fully kosher when they resolved upon it, we must presume that, if that changed, they wouldn’t seriously expect the country’s commercial courts to continue to uphold an enterprise that its criminal courts would put them jail for. So we must be talking about technical infringements and not fundamental ones. | |||
Fundamental illegality — like our assassination hypothetical — would be enough to undermine a [[Consensus ad idem|meeting of minds]] in the first place — in which case, what value a [[severability]] provision? — but even if it did not, it would be quite the stroke of luck if the lost ''benefit'' from amputating the newly outlawed part of the contract fell equally between the parties. | |||
Odds are, that is to say, that the severing a contract will favour one party over the other, in a way that, logically, they cannot predict before it happens. | |||
Say I have agreed, for a monthly fee of ten pounds, to provide you with five services, one of which later transpires to be illegal. The other four services remain valid, as does your obligation to pay me an amount of money once a month. So is the contract simply severed to cut out the illegal service? Must you now pay me ten pounds for ''four'' services? | |||
Equity says there should be some adjustment of the commercials; as we didn’t have a crystal ball, resolving this at the outset of a contract, with a [[severability]] clause seems cavalier. It would be much better for the parties to get together and restrike the deal in light of the changed services. | |||
Yet a severability clause seems to head this approach off. | |||
I know I keep banging on about complexity, but if there were ever a better example of forlornly trying to cater for a complex world with simple rules, this is it. Face facts: you are going to have to figure it out at the time. That such a prospect might give the heebie-jeebies to [[internal audit]], and the poor sap in [[compliance]] whose job it is to police the organisation’s [[risk taxonomy]], is an added frisson that some of you might find strangely ''satisfying''. I know I do. | I know I keep banging on about complexity, but if there were ever a better example of forlornly trying to cater for a complex world with simple rules, this is it. Face facts: ''you are going to have to figure it out at the time''. That such a prospect might give the heebie-jeebies to [[internal audit]], and the poor sap in [[compliance]] whose job it is to police the organisation’s [[risk taxonomy]], is an added frisson that some of you might find strangely ''satisfying''. I know I do. | ||
===Lady Macbeth=== | ===Lady Macbeth=== | ||
There is an element, too, of the lady protesting too much here: why would you enter a contract if you thought part of it might be illegal? What kind of operation are you running? | There is an element, too, of the lady protesting too much here: why would you enter a contract if you thought part of it might be illegal? What kind of operation are you running? | ||
If the choice is between blindly allocating unforeseeable losses at the start of the relationship with a [[severability]] clause, and hoping the parties can be adult enough to come together in good faith to sort out a compromise as and when the unforeseeable becomes a reality later — trusting each other, in other words, to [[Be a good egg|be good eggs]] and [[Non mentula esse|not dicks]] — then the [[JC]] knows where he’d rather be, and who he would rather be trading with. | If the choice is between blindly allocating unforeseeable losses at the start of the relationship with a [[severability]] clause, and hoping the parties can be adult enough to come together in good faith to sort out a compromise as and when the unforeseeable becomes a reality later — ''trusting'' each other, in other words, to [[Be a good egg|be good eggs]] and [[Non mentula esse|not dicks]] — then the [[JC]] knows where he’d rather be, and who he would rather be trading with. | ||
===[[Finance contract boilerplate]]=== | ===[[Finance contract boilerplate]]=== |