Blow-Up Provision
Also known as Poison pill
A term providing that if part of the arbitration scheme fails, the whole agreement — or the class waiver — falls with it.
Drafters use blow-up terms to make severance unattractive: if a court invalidates the class waiver, the entire arbitration obligation is void and the dispute proceeds in court, which the drafter may prefer to classwide arbitration. The mirror risk is that a single unconscionable term takes down an otherwise serviceable clause, which is precisely what happens when a court finds an agreement permeated by unconscionable provisions and declines to sever.
See also
- Severability ClauseA term preserving the remainder of an agreement if part is held invalid.
- Class Action WaiverA term barring claimants from proceeding on a class, collective, or representative basis.
- UnconscionabilityThe contract defence that voids terms that are both oppressively imposed and unreasonably one-sided.
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