Don’t Lose Your Enforceable Termination Clause to the Substratum Doctrine
If you’re an employer or HR representative well-acquainted with the realm of employment law blogs, you’ve undoubtedly encountered a myriad of cautionary tales about the perils of contracting errors. The blogs about this topic are countless – and for good reason! The significance of getting contracts right cannot be overstated, as a single mistake could potentially lead to substantial liabilities for your organization. An omitted phrase or a misused word within a termination clause could be the deciding factor between an 8-week statutory notice obligation and a hefty 24-month damages award.
However, let’s assume that you’ve taken every precaution. You’ve carefully reviewed your contracts, consulted legal experts, and you’re confident that your termination clauses are impeccably drafted. Is there still a risk that a court would refuse to enforce that termination clause? The answer, perhaps unsurprisingly, is yes. Even with meticulous drafting, there’s a legal principle that could potentially invalidate your termination clause – the Substratum Doctrine.