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If one clause in an agreement is invalid, this usually does not mean that the entire agreement fails. In principle, the rest remains valid, as long as the agreement can continue without that clause (partial nullity). Sometimes an invalid clause is even converted into a valid version.
Core terms and ancillary terms
An agreement contains core clauses — which define the essence, such as what is delivered and the price — and ancillary clauses, such as agreements regarding liability, payment, and termination. It makes a difference whether an invalid clause belongs to the core or not.
Partial nullity: the rest remains
If a clause is invalid (void or voidable), this in principle affects only that specific clause. The rest of the agreement remains in force, insofar as it can continue to exist without the invalid part (partial nullity, Article 3:41 of the Dutch Civil Code). An unreasonably onerous clause in general terms and conditions is thus rendered invalid, while the remaining conditions continue to apply.
When does the entire agreement fall away?
Sometimes an invalid clause is so inextricably linked to the rest of the agreement that it cannot continue to exist without it. In such cases, the entire agreement may be affected. This is particularly the case if the invalid clause is a core clause or if the parties would never have entered into the agreement without it.
Conversion: convert to a valid variant
Sometimes an invalid clause is converted into a clause that is valid and achieves the same objective as much as possible (conversion, Article 3:42 of the Dutch Civil Code). In this way, an overly broad provision can be reduced to what is just barely permissible. Whether this happens depends on the intention of the parties and the circumstances.
Frequently Asked Questions
Does the entire agreement become void if one clause is invalid?
Usually not. In principle, the remainder remains valid (partial nullity), unless the agreement cannot continue without that clause.
What happens to an unreasonable clause in my terms and conditions?
That single clause fails, while the remaining conditions in principle continue to apply.
What is conversion?
Converting an invalid clause into a valid variant that achieves the same objective as much as possible (Article 3:42 of the Dutch Civil Code).
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