Jurisdiction(s):
United Kingdom

Key definition

Duration definition

What does Duration mean? In debt capital markets, investment and treasury practice, duration describes how long, on average, it takes to receive a bond’s cash flows and how sensitive the bond’s price is to interest rate (yield) changes. Macaulay duration is the weighted average time to all cash flows, discounted at the bond’s yield; a higher Macaulay duration means cash flows are further out and the price is more interest rate sensitive. Modified duration translates this into an estimate of the percentage price change for a 1% change in yield. For securities with embedded options, practitioners may use effective duration. Duration is...

Severance of post-termination restrictive covenants: blue-pencil test, requirements, limits on judicial re-writing, examples and key case law

Published by a LexisNexis Employment expert

Practice notes

To be enforceable, any post-termination covenant must go no further than is strictly required to safeguard the employer’s legitimate business interests (see Practice Note: Legitimate business interest). A clause will not be upheld if it exceeds that minimum (see Practice Note: Post-termination restrictions—reasonableness: Reasonable as between the parties) and is, for instance, excessively broad in geographical scope or length. If a covenant reaches beyond what is needed, whether by area or time, it will not be enforced. Judges are not allowed to recast a covenant to make it reasonable and thus enforceable. Some employers add terms to employment contracts stating that, where the scope or duration is excessive, it may be cut down as needed to make the covenant effective. Such wording is, in general, of little effect. While the courts cannot redraft the covenant’s terms, they can excise unreasonable elements from what would otherwise be a valid restraint—removing the bad while preserving the good. For this severance power to preserve a covenant, it is crucial that the offending portions of the clause can...

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Web page updated on 22/05/2026

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