Joint and solidarity definition
What does jointly and severally mean?
Jointly and severally is a legal term used to describe a Partnership or any other group of individuals in which each named individual shares responsibility equally.
For example, if a judge decides that a number of people are jointly and severally liable for the damages suffered by a plaintiff, any of them can be sued for payment of the full amount of the judgment.
As the word implies individually, the wording of certain contractual agreements may specify that certain parties have proportionate liability. For example, a partner with a 10% stake in a company may have a liability commensurate with that 10% investment.
Jointly and severally is sometimes called joint and several liability.
Understand together and individually
In a legally binding document, the term jointly and individually clarifies the responsibility shared by each party to an agreement. Essentially, it states that all appointees are required to take all actions required under the agreement.
Key points to remember
- The term jointly and individually indicates that all parties are equally responsible for carrying out the full terms of an agreement.
- In a civil liability case, for example, each named party could be sued for reimbursement of the full amount owed.
- In some contracts, however, financial responsibility is shared proportionately.
For example, if a bank lends $ 100,000 to two people jointly and severally, those two people are also responsible for ensuring that the full loan amount is repaid to the bank. If the loan is in default, the bank may choose to pursue either one for repayment of the entire outstanding balance.
In such cases, the person who is obligated to repay the loan will have legal recourse against the other person named in the agreement, but only after full repayment from the bank.
If a bank lends $ 100,000 to two people jointly and severally, either may be required to repay the full amount owed in the event of default.
Joint and several liability is also cited in the laws. For example, employers are generally responsible for injuries sustained by their employees on the job. If a construction worker breaks a pipe in a house, the owner and employer could be held jointly and severally liable for damages under state law.
Jointly and severally in the securities sector
The expression jointly and severally is commonly used in the securities industry in subscription a new issue of bonds or shares. In such cases, the company that agrees to sell part of the total issue is liable for that agreed part plus a corresponding part of the unsold securities.
Thus, a subscriber who has jointly undertaken to take charge of the sale of a 30% stake in a new problem must sell 30% of any remaining unsold portion. Each member of the union is responsible for the remaining shares, in proportion to the size of each participation.