Jointly and Severally
What Is the Meaning of Jointly and Severally?
The phrase "jointly and severally" describes a partnership or group in which each individual shares equal legal responsibility. Jointly and severally is sometimes called joint and several liability.
It means that individual partners in an agreement commit to bear responsibility for the rest of the group whenever they are found liable. The plaintiff can seek full compensation for damages from one or all partners.
The extent of each individual's contribution to the liability does not matter. If the plaintiff pursues you and you compensate them, you may recover your loss from your partners afterwards, as stipulated in your partnership contract.
This form of liability is typically relevant in tort claims of negligence, business contracts, and loan agreements. It is useful for creditors when one party refuses to pay, is insolvent, or is challenging to locate.
Jointly vs. Jointly and Severally
When two or more parties can be held liable for the same liability, they can be held jointly, severally, or jointly and severally liable.
Joint liability and joint and several liability partnerships differ in their definition, how liabilities are shared, and creditor rights, as shown in the following table.
| Jointly | Jointly and Severally | |
| Meaning | All parties are responsible as a group | Each party is responsible individually and as a group |
| Liability | Liability is shared among members. | All liability can fall on one person. The plaintiff chooses which partner to sue to recover their damages. |
| Creditor Rights | A creditor pursues all parties together to recover full compensation | A creditor can sue one partner for full compensation. |
| Focus | Focuses on each partner bearing their responsibility. | The primary focus is on the plaintiff recovering full compensation. |
In "several liability," each party is responsible for their individual obligation as specified by their contract. For example, if your contract states that you are responsible for 50% of liabilities and the group owes $150, a creditor can only sue you for $75.
Preparing your contract with a suitable Partnership Agreement allows you to decide how to share liability.
Examples of Joint and Several Liability
Several agreements utilize joint and several liability arrangements to distribute responsibility among members. This arrangement can be used to settle compensation for injuries on a property, medical negligence, and defective products.
Below are some other examples:
Loan agreements
If two people apply for and receive a bank loan under a jointly and severally agreement, the bank can pursue either person for the entire outstanding balance. If you repay the loan, you may be able to pursue a legal claim against the other individual, only after the full amount has been repaid to the bank.
Contractual obligations
Joint and several liability may also arise in contractual agreements. Suppose a construction company works under a joint and several liability agreement. In that case, if an employee breaks a pipe in a house, the worker and the employer might be held jointly and severally liable for the damages, depending on state law.
Tort liability
When someone commits a civil wrong, they must make the victim whole. Suppose that in a motor accident, two jointly and severally liable drivers are responsible for a third party's injuries. The victim can pursue either driver for full compensation.
State Laws on Joint and Several Liability
State laws differ in their application of joint and several liability. Seven states have pure joint and several liability laws on their books. These states are Alabama, Delaware, Maryland, Massachusetts, North Carolina, Rhode Island, and Virginia.
In places with pure joint and several liability, multiple parties found responsible can each be held liable for the full amount. The seven mentioned states use this principle to resolve injury cases.
Other states vary in handling liability cases; many follow a hybrid rule. For example, the joint and several liability California law (CA Civ Code § 1431.2) is not pure. It applies to economic damages only. Non-economic damages are several.
Your state laws should answer the question: What is joint and several liability, and where does it apply?
Cons of Jointly and Severally
Creditors prefer a joint and several liability approach to claim resolution. However, the method has some cons, especially for the defendants.
- It unfairly burdens one party by making them liable for every partner's actions
- It is risky for parties with deeper pockets who become easy targets for creditors
- It presents a higher risk of internal legal disputes
- Recovering debts from your partners can be challenging if a partner files for bankruptcy
- Partners in an agreement may be apprehensive of taking high-value risks to grow their business
An alternative to the rule of joint and several liability is the rule of proportionate liability. Under this system, a defendant found by a jury to be 20 per cent responsible for a plaintiff's injury would be required to pay no more than 20 per cent of the final settlement amount.
Entering a contract comes with risks. Read each section carefully and ask: Are partners jointly and severally liable? Do I want to be part of it?
Our Partnership Agreement template provides a reliable foundation to set clear terms and responsibilities for every partner.
Create your Partnership Agreement now
Helpful Resources:
Cornell Law - Joint and Several Liability
What Is the Meaning of Jointly and Severally?
The phrase "jointly and severally" describes a partnership or group in which each individual shares equal legal responsibility. Jointly and severally is sometimes called joint and several liability.
It means that individual partners in an agreement commit to bear responsibility for the rest of the group whenever they are found liable. The plaintiff can seek full compensation for damages from one or all partners.
The extent of each individual's contribution to the liability does not matter. If the plaintiff pursues you and you compensate them, you may recover your loss from your partners afterwards, as stipulated in your partnership contract.
This form of liability is typically relevant in tort claims of negligence, business contracts, and loan agreements. It is useful for creditors when one party refuses to pay, is insolvent, or is challenging to locate.
Jointly vs. Jointly and Severally
When two or more parties can be held liable for the same liability, they can be held jointly, severally, or jointly and severally liable.
Joint liability and joint and several liability partnerships differ in their definition, how liabilities are shared, and creditor rights, as shown in the following table.
| Jointly | Jointly and Severally | |
| Meaning | All parties are responsible as a group | Each party is responsible individually and as a group |
| Liability | Liability is shared among members. | All liability can fall on one person. The plaintiff chooses which partner to sue to recover their damages. |
| Creditor Rights | A creditor pursues all parties together to recover full compensation | A creditor can sue one partner for full compensation. |
| Focus | Focuses on each partner bearing their responsibility. | The primary focus is on the plaintiff recovering full compensation. |
In "several liability," each party is responsible for their individual obligation as specified by their contract. For example, if your contract states that you are responsible for 50% of liabilities and the group owes $150, a creditor can only sue you for $75.
Preparing your contract with a suitable Partnership Agreement allows you to decide how to share liability.
Examples of Joint and Several Liability
Several agreements utilize joint and several liability arrangements to distribute responsibility among members. This arrangement can be used to settle compensation for injuries on a property, medical negligence, and defective products.
Below are some other examples:
Loan agreements
If two people apply for and receive a bank loan under a jointly and severally agreement, the bank can pursue either person for the entire outstanding balance. If you repay the loan, you may be able to pursue a legal claim against the other individual, only after the full amount has been repaid to the bank.
Contractual obligations
Joint and several liability may also arise in contractual agreements. Suppose a construction company works under a joint and several liability agreement. In that case, if an employee breaks a pipe in a house, the worker and the employer might be held jointly and severally liable for the damages, depending on state law.
Tort liability
When someone commits a civil wrong, they must make the victim whole. Suppose that in a motor accident, two jointly and severally liable drivers are responsible for a third party's injuries. The victim can pursue either driver for full compensation.
State Laws on Joint and Several Liability
State laws differ in their application of joint and several liability. Seven states have pure joint and several liability laws on their books. These states are Alabama, Delaware, Maryland, Massachusetts, North Carolina, Rhode Island, and Virginia.
In places with pure joint and several liability, multiple parties found responsible can each be held liable for the full amount. The seven mentioned states use this principle to resolve injury cases.
Other states vary in handling liability cases; many follow a hybrid rule. For example, the joint and several liability California law (CA Civ Code § 1431.2) is not pure. It applies to economic damages only. Non-economic damages are several.
Your state laws should answer the question: What is joint and several liability, and where does it apply?
Cons of Jointly and Severally
Creditors prefer a joint and several liability approach to claim resolution. However, the method has some cons, especially for the defendants.
- It unfairly burdens one party by making them liable for every partner's actions
- It is risky for parties with deeper pockets who become easy targets for creditors
- It presents a higher risk of internal legal disputes
- Recovering debts from your partners can be challenging if a partner files for bankruptcy
- Partners in an agreement may be apprehensive of taking high-value risks to grow their business
An alternative to the rule of joint and several liability is the rule of proportionate liability. Under this system, a defendant found by a jury to be 20 per cent responsible for a plaintiff's injury would be required to pay no more than 20 per cent of the final settlement amount.
Entering a contract comes with risks. Read each section carefully and ask: Are partners jointly and severally liable? Do I want to be part of it?
Our Partnership Agreement template provides a reliable foundation to set clear terms and responsibilities for every partner.
Create your Partnership Agreement now
Helpful Resources:
Cornell Law - Joint and Several Liability