On the Comma that cost 1 Million

You may have read it in the New York Times, the Legal Reader or on AboveTheLaw, a single comma in a 14- page Canadian contract may decide whether the contract was rightfully cancelled by Atlantic Canada, a telephone company.  This decision supposedly is worth 1 million Canadian dollars.

The contractual language at issue is as follows:

“This agreement shall be effective from the date it is made and shall
continue in force for a period of five (5) years from the date it is
made, and thereafter for successive five (5) year terms, unless and
until terminated by one year prior notice in writing by either party.”

At first I thought I agreed with the Canadian regulator that had to decide the issue.  It held that the contract could have been cancelled as early as one year after its execution and not only after the expiration of the first five year term.  However, the longer you stare at the language, the less certain it becomes. 

According to the New York Times, Ken Adams, the leading expert on contract drafting, has been  commissioned by the opposing party, Rogers Communications, to write a a 69-page affidavit to address the issue in Roger’s favor.

Another interesting aspect of the case is that Rogers claims that in its French version (which has equal status under Canadian law), the contract has a different statement clarifying the point. 

What is the lesson to take away from this media spectacle?  Grammar and clarity in contract drafting are important. 

In addition, whenever two languages are at play, consider including language in the agreement setting forth which language is to govern in case of a dispute over the meaning of the contract.

About Imke Ratschko

Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027.

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