This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
An abstract definition of an entire contract or of a severable contract is difficult; and this difficulty extends to the rules for ascertaining the intention of the parties and the legal effect of any given contract. This difficulty arises in part out of the general difficulties of ascertaining the intention of the parties,1 and in part out of the fact that the question of the entire or severable character of any given contract may arise in a number of different ways. It may arise in connection with the sufficiency of a consideration on the one side to support two or more covenants on the other.2 It may arise in connection with the effect of an illegal covenant upon the remaining valid covenants of the contract.3 It may arise in connection with the effect of the Statute of Frauds upon a contract some of whose covenants are within the scope of the statute, but the remaining covenants of which are without the scope of the statute.4 It may arise in connection with an attempt to affirm part of a voidable contract and to ratify the rest, which can be done if the contract is severable, but not if it is entire. It may arise in connection with questions of performance, in cases in which certain covenants have been performed substantially and others have not, and the question is presented of the effect of breaches of certain covenants as operating as a discharge of the remaining covenants.1 It may arise in connection with the effect of a judgment upon certain covenants as merging the remaining covenants of the contract.1 A contract by which A agrees to support B for life in consideration of a conveyance by B to A, is said to be severable so that a decree in B's favor against A for rescission does not prevent A from recovering the value of the services and support furnished under such contract.7 It does not seem necessary, however, to invoke the theory that such contract is severable in order to reach this result. The suit for rescission did not involve the question of compensation for services rendered; and accordingly the right to recover compensation for services was not barred by the decree for rescission.8
6 Garon v. Credit Foncier Canadien, 37 R. I. 273, 02 Atl. 561 [rehearing denied, Garon v. Credit Foncier Canadien, 92 Atl. 1022].
"An indivisible contract, as the phrase implies, is a contract whose constituent parts can not be separated. Therefore there are only two courses open to the defendant: it must accept the contract as a whole, or reject it as a whole. If accepted, the defendant must repurchase the stock. If rejected, the defendant must return the money to the plaintiffs." Garon v. Credit Foncier Canadien, 37 R. I. 273, 02 Atl. 561 [rehearing denied, Garon v. Credit Foncier Canadien, 92 Atl. 1022].
7 Manistee Navigation Co. v. Louis Sands Salt & Lumber Co., 174 Mich. 1, 140 N. W. 565; Cantwell v. Crawley, 188 Mo. 44, 86 S. W. 251.
8 Cantwell v. Crawley, 188 Mo. 44. 86 S. W. 251; Thompson-Starett Co. v. E. B. Ellis Granite Co., 86 Vt. 282. 84 Atl. 1017; Waitc v. Stanley, 88 Vt. 407, 92 Atl. 633 [citing, Fay v. Oliver. 20 Vt. 118, 40 Am. Dec. 764; White v White. 68 Vt. 161, 34 Atl. 425].
1 See Sec. 2020 et seq.
2 See Sec. 525.
3 See Sec. 1030 et seq.
4Mattison v. Connerly, 46 Mont. 103, 126 Pac. 851. See Sec. 1425.
Under the Louisiana statute,9 the divisibility of an obligation depends upon whether the object of the obligation is a thing or fact which is susceptible of division.10
The theory of severable contracts is sometimes misapplied in cases in which a covenant is void; and the power of the law to give effect to the remaining valid covenants of the contract, ignoring the covenant which is merely void, is justified by calling the contract severable, although it is essentially an entire contract.11 While a contract by which an employer stipulates for immunity from liability is void and unenforceable, it does not render invalid the remaining provisions of the contract.12 While such a contract is entire since the parties intended the- immunity from liability to be related to all of the remaining covenants, and since the consideration is not apportioned among the different covenants, the result of enforcing certain covenants while ignoring others has been justified on the theory that the contract was severable.13 Under a statute which forbids anything but money to be given for stock in a corporation, the parties can not give a promissory note therefor; but the objections to such a transaction are removed by a subsequent arrangement by which cash is paid for such stock by third persons, who are to be reimbursed by the purchaser.14
5 West v. McDonald, 64 Or. 203, 127 Pac. 784.
See Oh. LXXXIV.
6 Lima v. Campbell, 219 Mass. 253, 106 N. E. 858; Jameson v. Board of Education, 78 W. Va. 612, L. R. A. 1916F, 926. 89 S. E. 255.
See Ch. LXXVI.
7 Lima v. Campbell, 219 Mass. 253. 106 N. E. 858.
8 See Sec. 1142.
9 Art. 2108 of the Civil Code.
10 Stookstill v. Byrd. 132 La. 404, 61 So. 446.
11Ramsav v. Crevlin. 254 Fed. 813; Piper v. Boston & Maine Ry., 75 N. H 435, 75 Atl. 1041.
12 See Sec. 1035 et seq.