Blue Pencil Rule

Where a contract makes no sense a Judge has discretion to delete and change the void or illegal clause and put in wording that the parties should have actually used.

This is called the “blue pencil rule”.  A case worth looking at is Phrophet plc v Huggett (2014) EWCA CIV1013, where the Judge decided that the lawyer who drafted the contract had not written down the parties’ intentions, and so instead the Judge substituted wording that should have been used.

These cases can be go way and can be very uncertain and therefore expert legal advice should be taken in drafting a commercial contract, particularly one involving restrictive covenants preventing non-competition of employees who are leaving.

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