Severability

An overly broad non-compete or other restrictive covenant is one of the more common clauses a Canadian court strikes down in a business sale dispute. A severability clause is what keeps the rest of the sale agreement — the price, the closing mechanics, the indemnities — intact if that happens, rather than unwinding the entire deal.

The mistake people actually make

Assuming severability lets a court simply narrow an unenforceable clause down to something reasonable and enforce that instead. Some Canadian courts will "read down" or blue-pencil an overbroad clause to a reasonable scope, but others will not rewrite a party’s bargain for them and will strike the whole clause instead. An overbroad restrictive covenant is a real risk of losing that protection entirely, not a safe way to ask for more than needed.

The Quebec difference

Quebec’s Civil Code has its own codified rule for when a null clause is simply deemed unwritten versus voiding the whole contract, turning on whether that clause was a determining reason for entering into the agreement in the first place — a more structured, statutory approach than the common law’s case-by-case severability analysis.