What Is Jointly and Severally?

"Jointly and severally" is a legal term that is used to describe a partnership or any other group of individuals in which each individual shares responsibility equally.

For example, if a judge rules that a number of people are jointly and severally liable for inju♛ries suffered by a plaintiff, any one of those people may be pursued for payment of the full amount of the judgment.

As the word severally implies, the phrasing of some contractual agreements may specify that some parties have proportional liability. For example, a partner ꦑwith a 10% stake in a business may have a liability that is proportional to that 10% investment.ꦦ

Jointly and severally is sometimes referred to as 澳洲幸运5官方开奖结果体彩网:joint and several liability.

Understanding Jointly and Severally

In a legally binding document, the term "jointly and severally" clarifies the responsibility that is shared by each party to an agreement.

Essentia🍌lly, it means that all of those named are obligated to perform all of the actions required under the🌳 agreement.

For example, if a bank lends $100,000 to two people jointly and severally, both of those people are equally responsible for making sure that the total amount of the loan is repaid 🥃to the bank. If the loan is in default, the bank may choose to pursue either for repayment of the entire ouﷺtstanding balance.

In such cases, the person who is forced to repay the loa♎n will have some legal recourse against the other person named in the ag🌱reement, but only after the bank is repaid in full.

Joint and several liability is also cited in legal language. For 💝example, employers are generally responsible for injuries suffered by their employees on the job.

If a construction worker is injured at work, all owners of the construc🥂tion firm could be liable.

Jointly and Severally in the Sec🗹urities Industry

The expression jointly and severally is commonly used in the securities industry in agreements for the underwriting of a new bond or stock issue.

In such cases, a firm that agrees to sell a portion of the total issue is responsible for that agreedꦚ-upon portion plus a corresponding portion of any unsold ൩securities.

Thus, an underwriter who has jointly and severally agreed to be responsible for selling a 30% stake in a 澳洲幸运5官方开奖结果体彩网:new issue must sell 30% of any remaining unsold portion. Each member of the 澳洲幸运5官方开奖结果体彩网:syndicate is responsible for any leftover shares, in proportion to the size of the💎ir stake.

The Bottom Line

Jointly and severally refers to a form of responsi🧔bility in a partnership by which all partners equally share responsibility for liabilities, actions, and any other activities of the business. It also🌃 means that each partner can be pursued by creditors for outstanding debts.