Striking a Balance: The “Blue Pencil Doctrine” in UK Contract Law

The Blue Pencil Doctrine is a legal principle primarily used in the context of contract law, particularly in cases involving restrictions that may be deemed overly broad, illegal, and/or unenforceable.

The doctrine allows a court to modify or "blue-pencil" a contract, striking out certain terms or clauses that are considered illegal and/or unenforceable, while leaving the rest of the contract valid. This enables the court to preserve the overall validity of the contract without invalidating the entire document.

While the Blue Pencil Doctrine is applied in various jurisdictions (UK, USA, India, etc.), its application varies. Some courts may only allow modifications if the terms that remain after "blue-penciling" are still consistent with the parties' original intent, while others may refuse to use the doctrine if it would significantly alter the nature of the agreement.

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1. Striking a Balance: The “ Blue Pencil Doctrine ” in UK Contract Law Mgr. Hovsep Kocharyan , Ph.D. Head of the Legal Department of Artlex Consult s.r.o. E-mail: [email protected]

2. What is the meaning of this doctrine? The blue pencil doctrine is a legal principle used in the UK contract law. The doctrine of blue pencil originated in England and was later developed by the English , Indian and American courts. The blue pencil doctrine in contract law comes from the case of Mallan v. May (1844) 13 M and W 511 . Th is practice initially started with non-compete agreements and was later given broader application by the courts. It allows the court to modify or strike out certain parts of a contract, usually unenforceable , unnecessary, illegal, unenforceable, and/ or overly broad clauses , while keeping the rest of the contract valid and enforceable. In some cases and jurisdictions, t h is doctrine permits the court to m odify the clause to make it reasonable .

3. Why is it called the “ B lue P encil Do ctrine”? The word “blue pencil” itself comes from the use of a blue pencil for editing or even censoring films or manuscripts. The “blue pencil doctrine” is named after the blue pencil editors used to correct text . The blue color is historically linked to editorial markup , because it wouldn’t appear in photo reproductions . The term itself was used in 1920 in the case of Atwood v. Lamont [1920] 3 K.B. 571. In legal contexts, courts do no t literally use blue pencils. The term is figurative , not a literal practice: it i s about the power to edit or remove parts of a contract, not about the actual tool used.

4. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] A.C. 535 This case, which also involved a non-compete agreement , played a key role in establishing the prominence of th is doctrine. Rooted in the principle of severability, the doctrine is frequently observed in common law systems (USA, India, etc.). The case established that t he "Blue pencil doctrine" can be used as a method for deciding whether contractual obligations can be partially enforced , when the obligation as drafted in the contract has an element of illegality .

5. Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] A.C. 535 Clauses that restrain trade are prima facie void under UK law, but they may be considered valid if the following three conditions are met: The terms seek to protect a legitimate interest; The terms are reasonable in scope from the viewpoint of the parties involved; The terms are reasonable in scope from the viewpoint of public policy .

6. Tillman v Egon Zehnder Ltd [2019] UKSC 32 This particular case exemplifies how the Blue Pencil Doctrine is applied even in the recent case law . The question was: “ Is the unenforceable provision capable of being removed without the necessity of adding to or modifying the wording of what remains (the "blue pencil" test)? ” The Supreme Court held that the phrase “or interested” could be removed from clause 13.2.3 of the employment agreement without needing to change or add to the rest of the wording. Removing it did not significantly alter the overall effect of the restraints. As a result, the employer succeeded and was granted the injunction .

7. What are the advantages of this doctrine/test ? T he Blue Pencil Doctrine can be considered a useful legal concept, but its usefulness is context-dependent and comes with limitations. The advantages are the following: Instead of voiding an entire agreement because of one problematic clause, courts can enforce the remainder, maintaining legal certainty and fairness. It can save time and resources by avoiding renegotiation . It protects parties from being unfairly bound by overly broad or illegal terms , while still respecting the overall intent of the agreement.

8. W hat a re the shortcomings of th is doctrine ? The Blue Pencil Doctrine may lead to artificial results or even distort party intentions: Courts may end up enforcing phrases or clauses that don’t make sense or reflect the parties' actual intentions after parts are removed. Not all legal systems or states apply the doctrine the same way : Some allow only strict severance ( no rewriting ). Others allow reformation ( modifying the clause to make it reasonable ). This creates inconsistency and legal uncertainty.

9. Conclusions The Blue Pencil Doctrine: Allows courts to preserve valid parts of a contract by striking out void or unenforceable clauses . Promotes fairness and efficiency by avoiding the need to discard entire agreements due to one problematic clause . Commonly applied in non-compete agreements, where overly broad restrictions can be narrowed down. In some jurisdictions, it d oes not permit rewriting or adding new terms , only deletion of severable parts. Not without shortcomings : it may distort original intent, varies across jurisdictions, and can encourage overly aggressive drafting. Based on the principle of severability, making it a key tool in common law contract interpretation.

10. In complex legal practice, uncertainty around contract enforceability can expose your business to significant risks. At Artlex Consult , we can ensure your contracts are robust, clear, professional and tailored to withstand legal challenges. Our expert team reviews and drafts any kind of business and/or employment agreements that protect your legitimate interests while minimizing vulnerabilities — helping you avoid costly disputes and maintain strong business and/or employment relationships. Don’t leave your contracts to chance or rely on the court’s judgments . Partner with us to gain confidence and peace of mind knowing your agreements will hold up in court and support your strategic goals. Feel free to contact us at: [email protected] How confident are you that your contracts would hold up in court s if challenged?