Revisiting The Law Of Blue Pencil Within The Indian Legal Framework

Introduction

During the process of drafting a contract, it might contain unclear or unauthentic clauses that can be rectified. However, once the contract is signed and challenged in court, rectifying it may become more complex. Some parts of a lengthy document might contain errors leading to the nullification of the contract. Despite this, certain clauses that form the crux of the agreement are crucial to retain. This raises concerns about weaker clauses impacting the validity of the contract.

Recognizing this issue, the court introduced a remedial tool known as the "doctrine of severability" to address such scenarios. This doctrine allows the court to redact unlawful portions of a document while preserving the rest.

The "blue pencil" concept, initially used by editors to eliminate objectionable content, functions similarly to a red strikethrough, excising offensive statements while maintaining the document's other aspects. Within legal parameters, this doctrine, arising from the doctrine of severability, enables the court to excise unlawful portions.

The principle, outlined in Halsbury's Laws of England, suggests that contracts rarely become entirely illegal or void, and only specific parts may be lawful. The question arises whether the illegal sections can be severed, enabling enforcement of the remainder.

However, the blue pencil rule's interpretation varies significantly, applicable mainly in trade and contract law but not limited to these areas. Despite its origin in contract law and severability, its applicability extends beyond these realms.

This article revolves around the Blue Pencil Doctrine, especially in cases concerning disputes within non-compete agreements. This doctrine finds common application in contract law, specifically in the field of enforcing promises and contracts.

"The blue pencil test, originating from contract law's enforcement, seeks introduction into public law, particularly in cases related to restraint of trade."

Legality in a contract

As this pertains to the legality of contracts, what renders a contract legal are the lawful considerations among the involved parties. Any agreement that contains offensive or inappropriate clauses is prima facie declared null or void. Section 23 of the Indian Contract Act differentiates between legal and non-legal considerations, significantly impacting a contract's legality.

Section 23 of the Indian Contract Act outlines what constitutes lawful considerations and objects in an agreement. It deems an agreement's consideration or object lawful unless it falls under specific prohibitions:

• It is forbidden by law.
• It would defy any law if permitted.
• It is fraudulent or involves injury to another's person or property.
• The court deems it immoral or against public policy.

Should any part of an agreement include these elements, the court holds the authority to declare it void. This section addresses the illegality of both the object and the consideration forming the contract, becoming pivotal in discussing the concept of severability in contracts.

Furthermore, this section delineates the objects and aspects of an agreement considered unlawful, covering direct as well as indirect or implied provisions that are impermissible.

In conclusion, anything deemed illegal as per Section 43 of the Indian Penal Code is void. However, exploring remedies, the subsequent sections of the Indian Contract Act discuss the nullification of contracts involving illegal considerations or objects.

Section 24 of the Indian Contract Act states that if any part of a single consideration for one or more objects is unlawful, the entire agreement becomes void. This scenario explicitly excludes contracts with any illegal aspect from being recognized in a court of law. This doctrine emerged as an exception within Section 24 of the Indian Contract Act of 1872, initially not favored but later incorporated into the act.

"The strict application of the blue pencil rule restricts courts from rephrasing overly broad non-compete agreements. Instead, it allows courts to only strike out excessive provisions while enforcing the remainder of the agreement."

History of Blue Pencil Rule

In the landmark case of Mallan vs. May in Wales, England, the court delved into contract disputes, laying the foundation for the Law of Severability, which later evolved into the Blue Pencil Doctrine. The Law of Severability, at its core, addresses the extent to which an inconsistent part of legislation can be deemed invalid under Article 13 of the Indian Constitution.

Article 13 of the Indian Constitution defines the Doctrine of Severability as a safeguard against infringing fundamental rights. It outlines that any part of legislation exceeding the boundaries of constitutional rights will be declared invalid. If the unconstitutional part is separable from the legislation, only that specific part is invalidated; otherwise, the entire legislation faces nullification.

Severability plays a crucial role in nullifying unconstitutional aspects within legislation. Courts, while traditionally considering contracts in restraint of trade as void, have started validating them if deemed reasonable. Should any clause be excessively broad, the court applies the Blue Pencil Rule to strike down that specific portion.

The origins of this rule date back over a century in the courts of America and England. The term "blue pencil" was introduced by Lord M.R. Sterndale in the case of Attwood v. Lamont. Justice Bailhache elucidated that while certain covenants in a contract can be severed using a blue pencil—removing excessive restrictions—a single, indivisible restriction cannot be split by the courts. Courts will only sever parts of a contract if this can be achieved practically using a blue pencil, not otherwise.

Applicability of Blue Pencil

Blue pencil should be used only when there are vague statements which cannot be applied legally and be enforceable, if those clauses aren’t necessary or wane the reasonability of the contract in any manner. While using this doctrine, the court also makes sure that the actual and core meaning of the contract isn’t being harmed in any way and that, it still carries the base of it.?

A threefold test should be applied in order to see the applicability of the blue pencil rule, 10?

• The unenforceable provision can be severed without the necessity of adding or modifying the wording of what remains.
• The remaining terms continue to be supported by adequate consideration.
• The severance of the unenforceable provisions does not distort the parties' bargain so much that it materially differs from the contract the parties entered into ("does not so change the character of the contract that it becomes not the sort of contract that the parties entered into at all").?

Conclusion

The Blue Pencil law exemplifies how our courts offer recourse to the affected parties. From a simple English rule, it has evolved into a widely utilized tool not just in India but globally. This law signifies that laws exist solely to aid people. The Law of Blue Pencil stands as a significant testament in the legal sphere, particularly in resolving disputes between parties. In a country where a substantial number of pending cases revolve around contracts, overlooking this section and dismissing the doctrine of the blue pencil as a key solution for the parties involved becomes inevitable.

This article presents the insights of?Anjanay Pratap Singh a first year student at University of Lucknow. The author's perspectives and opinions are entirely based on their personal viewpoint.