The Blue Pencil Doctrine allows a court to modify or remove unenforceable portions of a contract, such as overly broad non-compete clauses, while retaining the valid and reasonable portions. This approach aims to uphold the contract's overall intent without nullifying it entirely.
Blue Pencil Doctrine. In the event any of the terms of this Agreement are determined by a court of competent jurisdiction to be unreasonable or overbroad under circumstances then existing, the parties hereto authorize and request the court to apply the “blue pencil doctrine” to modify the unreasonable or overly broad term to make it enforceable against Employee. This Agreement shall not be construed against any party regardless of who was more responsible for its preparation.
The parties hereby acknowledge and agree that a court of competent jurisdiction shall invoke and exercise the blue pencil doctrine to the fullest extent permitted by law to enforce this Agreement.
Reasonableness/Blue Pencil Doctrine. The Participant understands that the restrictive covenants and other terms set forth in this Exhibit A are intended to protect the Company’s (and its subsidiaries’ and affiliates’) established employee, customer, client, vendor and/or counterparty relations, and the general goodwill of the business of the Company and its subsidiaries and affiliates. The Participant and the Company agree that the covenants set forth in this Exhibit A are reasonable with respect to duration, geographical area, and scope. If the final judgment of a court of competent jurisdiction declares that any term or provision of this Exhibit A is invalid or unenforceable, the parties agree that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Exhibit A shall be enforceable as so modified after the expiration of the time within which the judgment may be appealed.
Blue Pencil Doctrine. If the duration, scope or any business activity covered by any provision of this Section 7 is in excess of what is valid and enforceable under applicable law, such provision shall be construed to cover only such duration, scope or activity that is valid and enforceable. Executive hereby acknowledges and agrees that this Section 7 shall be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.
Blue Pencil Doctrine. If the duration of, the scope of or any business activity covered by any provision of this Section 4 is in excess of what is determined to be valid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is determined to be valid and enforceable. Executive hereby acknowledges that this Section 4 shall be given the construction that renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law.
Blue Pencil Doctrine. It is expressly understood and agreed by Executive that although Executive considers the restrictions in this Agreement to be reasonable, if a final determination is made by a court of competent jurisdiction or an arbitrator that the time or territory or any other restriction contained in the Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court or arbitrator may determine or indicate to be enforceable.
Blue Pencil Doctrine. Executive acknowledges that he has carefully read and considered the provisions of this Section 3, and having done so, agrees that the restrictions set forth herein are fair and reasonably required for the protection of the legitimate business interests of the Company. In the event that, notwithstanding the foregoing, any part of the covenants set forth shall be held to be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included herein. In the event that any provision of this Agreement shall be declared by a court of competent jurisdiction to be unreasonable or unenforceable, the court shall enforce the provision in a way which the court deems to be reasonable and enforceable.
Blue Pencil Doctrine. If the duration of, the scope of or any business activity covered by any provision of this ARTICLE III is found by a court of competent jurisdiction to be in excess of what is valid and enforceable under applicable law, such provision shall be construed to cover only that duration, scope or activity that is valid and enforceable, and all other provisions of this ARTICLE III shall remain in full force and effect. The Participant hereby acknowledges that this ARTICLE III shall be given the construction that renders its provisions valid and enforceable to the maximum extent, not exceeding its express terms, possible under applicable law. Notwithstanding anything to the contrary, this Section 3.6 shall in no event apply to the extent its application would render this ARTICLE III (or any portion thereof) unenforceable under applicable law.
Blue Pencil Doctrine. To the except permitted by applicable law, if the duration of, the scope of or any business activity covered by any provision of Sections 12, 13, and 14 is in excess of what is determined to be valid and enforceable under applicable law, such provision will be construed to cover only that duration, scope or activity that is determined to be valid and enforceable. Employee hereby acknowledges that these sections will be given the construction that renders their provisions valid and enforceable to the maximum extent, not exceeding their express terms, possible under applicable law.
This Agreement contains the parties' entire agreement regarding its subject matter. Except as modified by a court of competent jurisdiction pursuant to the blue pencil doctrine or otherwise, this Agreement may only be amended in a writing signed by the parties.
Periods of Noncompliance and Reasonableness of Periods. The Bank and the Executive acknowledge and agree that the restrictions and covenants contained in Section 5 are reasonable in view of the nature of the Bank’s Business and the Executive’s advantageous knowledge of and familiarity with the Bank’s Business, operations, affairs, and Customers. Notwithstanding anything contained herein to the contrary, if the scope of any restriction or covenant contained in Section 5 is found by a court of competent jurisdiction to be too broad to permit enforcement of such restriction or covenant to its full extent, then such restriction or covenant shall be enforced to the maximum extent permitted by law. The parties hereby acknowledge and agree that a court of competent jurisdiction shall invoke and exercise the blue pencil doctrine to the fullest extent permitted by law to enforce this Agreement.
Blue Pencil Doctrine. It is expressly understood and agreed by Executive that although Executive considers the restrictions in this Agreement to be reasonable, if a final determination is made by a court of competent jurisdiction or an arbitrator that the time or territory or any other restriction contained in the Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court or arbitrator may determine or indicate to be enforceable.
The Blue Pencil Doctrine is a legal principle used primarily in contract law that allows a court to modify or strike out certain portions of a contractual agreement while leaving the remainder of the contract intact and enforceable. The doctrine is often employed in cases involving non-compete clauses or restrictive covenants where certain terms may be overly broad or unreasonable. The name comes from the metaphorical “blue pencil” a judge uses to edit or excise the unenforceable sections of a contract.
The Blue Pencil Doctrine should be considered when dealing with contracts that contain provisions which could potentially be unenforceable due to being overly broad, vague, or unreasonable. It is particularly relevant in:
Courts will employ the doctrine to ensure that the valid and enforceable portions of the contract remain in effect, thereby maintaining the original intent and fairness of the agreement without causing hardship to one party.
When drafting a contract with regard to the Blue Pencil Doctrine, it’s important to:
By structuring a contract in this way, you can enhance its enforceability and protect against the need for judicial intervention.
Contracts that typically address considerations of the Blue Pencil Doctrine include:
These contracts often contain clauses that might need blue penciling, especially in jurisdictions where the doctrine is recognized and used to adjust unfair or overbearing terms.
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