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Nit Picking for $2M

When does termination option apply?

This is not strictly patent related, except that it highlights the importance of careful drafting. As illustrated by this cautionary tale, imprecise language can occasionally come back with a vengeance to bite you and/or your client.

The Globe and Mail reports on “the most costly piece of punctuation in Canada,” in which one ambiguously drafted clause costs Rogers Communications over $2M in a contract dispute. (Actually, the culprit is not exactly the punctuation per se, but rather a poorly drafted sentence.)

Page 7 of the contract at issue states that the agreement “shall continue in force for a period of five years from the date it is made, and thereafter for successive five year terms, unless and until terminated by one year prior notice in writing by either party.”

According to this sentence, when does the termination option apply?

Apparently Rogers intended that the termination option apply only in the “successive five year terms.” However, there’s a very good argument to be made that the “unless and until” clause applies any time the agreement is in force. The writer chose to draft the sentence almost as if he or she were presenting a list of independent clauses setting out conditions under which the agreement shall continue in force: it shall continue for five years; it shall continue thereafter for successive five year terms; and it shall continue unless and until terminated.

Although the sentence, as drafted,  is somewhat ambiguous, I think the Canadian Radio-television and Telecommunications Commission (CRTC)  probably parsed the sentence correctly.

Rogers could have eliminated the ambiguity by not trying to pack so much information into a single sentence. One possible re-draft might read as follows:

The agreement “shall continue in force for a period of five years from the date it is made. Thereafter, the agreement shall continue in force for successive five year terms, unless and until terminated by one year prior notice in writing by either party.”

This re-draft is somewhat more verbose, as the subject (“the agreement”) is repeated in successive sentences. However, this more verbose formulation eliminates the ambiguity that was present in the original. When the first five year period and the subsequent five year periods are addressed in separate sentences, it becomes clear that the termination clause applies only “[t]hereafter… for successive five year terms….”

Thanks to TidBITS for bringing the story to my attention.

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