Understanding Severally in Legal Terms
The term severally is pivotal in legal and business environments. Understanding its definition and application can significantly impact how one interprets contracts and obligations.
What Does ‘Severally’ Mean?
Legally, the term severally means to act separately or individually, reflecting a scenario where parties are accountable for their distinct responsibilities. This term often becomes relevant in contrast to terms like jointly or joint and several liability, which allocate collective responsibilities among parties.
Example of ‘Severally’ in Use
Consider a scenario where three business partners sign an agreement to secure a loan. Suppose the contract stipulates that each partner is responsible severally. In this case, each partner will only be liable for their designated portion of debt and not for any default by another partner.
- Contract Phrase: “The Borrowers severally agree to repay $10,000 each toward the loan.”
- Implication: Each partner is independently accountable for their $10,000, without bearing the responsibility for the others’ obligations.
Frequently Asked Questions (FAQ)
Q1: How does ‘severally’ differ from ‘jointly’?
A1: When parties are held ‘severally’ liable, each one is responsible only for their individual obligation. In contrast, being ‘jointly’ liable means that all parties collectively share the responsibility for the full obligation.
Q2: Can a contract include both ‘severally’ and ‘jointly’ terms?
A2: Yes, oftentimes contracts can use both terms. For example, ‘joint and several liability’ means parties can be required to fulfill an obligation together or individually, whichever the creditor chooses.
Q3: Is ‘severally’ applicable only in finance and business contracts?
A3: No, while commonly found in financial and business contexts, ‘severally’ can apply broadly across various legal scenarios, including real estate and insurance.
By understanding the term severally, one can gain clarity on their specific rights and responsibilities within legal contracts, ensuring informed decision-making and a clear comprehension of individual obligations.
Related Terms: jointly and severally, in severalty, individual liability, contract law.
