The Blue Pencil Doctrine is a legal principle that allows courts to modify or "blue pencil" (edit) overly broad contractual provisions to make them enforceable, rather than striking them down entirely. In real estate contexts, this typically applies to restrictive covenants, non-compete clauses, or other limitations on property use that may be geographically, temporally, or scope-wise unreasonable. For example, if a real estate contract contains a covenant preventing any commercial use within 50 miles for 50 years, a court might narrow it to 5 miles for 5 years to make it reasonable and enforceable. This doctrine matters because it gives parties a second chance—rather than losing the entire protective provision, courts can salvage a reasonable version of what the parties intended.
However, the availability and application of the Blue Pencil Doctrine varies significantly by jurisdiction. Some states embrace it readily, while others refuse to modify contracts and will simply void overly broad provisions entirely. This unpredictability creates risk: a party relying on a restrictive covenant may discover that their jurisdiction doesn't apply the doctrine, leaving them with no protection at all. Additionally, the doctrine only applies if the court finds the provision was made in good faith and the overreach was not egregious or intentional.
When drafting restrictive covenants in real estate transactions, do not rely on the Blue Pencil Doctrine as a safety net for overly broad language. Instead, research your specific jurisdiction's stance on the doctrine and draft provisions that are reasonable and defensible on their face. Include tiered or "fallback" language that explicitly authorizes courts to narrow the provision if needed (e.g., "this covenant shall apply to the maximum extent permitted by law"). This proactive approach increases enforceability and demonstrates good faith, making courts more likely to uphold your intent even if modification is necessary.
Frequently Asked Questions
What does this clause mean in simple terms?
The Blue Pencil Doctrine is a legal principle that allows courts to modify or "blue pencil" (edit) overly broad contractual provisions to make them enforceable, rather than striking them down entirely. In real estate contexts, this typically applies to restrictive covenants, non-compete clauses, or other limitations on property use that may be geographically, temporally, or scope-wise unreasonable.
Why should I care about this clause?
For example, if a real estate contract contains a covenant preventing any commercial use within 50 miles for 50 years, a court might narrow it to 5 miles for 5 years to make it reasonable and enforceable. This doctrine matters because it gives parties a second chance—rather than losing the entire protective provision, courts can salvage a reasonable version of what the parties intended.
What are my options?
However, the availability and application of the Blue Pencil Doctrine varies significantly by jurisdiction. Some states embrace it readily, while others refuse to modify contracts and will simply void overly broad provisions entirely.
How does this affect small businesses?
This unpredictability creates risk: a party relying on a restrictive covenant may discover that their jurisdiction doesn't apply the doctrine, leaving them with no protection at all. Additionally, the doctrine only applies if the court finds the provision was made in good faith and the overreach was not egregious or intentional.