You’ve probably seen a joint and several clause in a contract before. It reads something like “Each Borrower agrees it is jointly and severable liable for the debt”. Or “an agreement on the part of two or more persons binds them [jointly and not severally/severally and not jointly/jointly and each of them severally].
“Jointly” means, in the example used, that both parties are responsible for the debt.
“Severally” means they are only responsible for their part of the debt.
When used together, it means that the party relying on the clause can go after either party for the debt.
It is important to ensure you get it right in drafting and ensure you can recover money or enforce obligations against the correct parties. Generally, the more people bound by such a clause the better your risk is managed.
If you require advice with clauses in your business please contact us here.