The term refers to the traditional practice of using a blue pencil to edit written copy.
[1] Other statutory provisions such as the Sale of Goods Act 1979 and the Unfair Terms in Consumer Contracts Regulations 1999[2] have established the blue pencil principle in statute law.
In Rose & Frank Co v JR Crompton & Bros Ltd, the blue pencil rule was used to strike out an unacceptable clause in a memorandum of understanding agreement, which appeared to try to exclude the jurisdiction of the courts.
In most jurisdictions, courts routinely "blue pencil" or reform covenants that are deemed not reasonable.
[3] In Israel, the blue pencil method has been used to strike out illegal or unconstitutional parts of a statute and to leave the rest intact.