The Calamity of the Comma

We present for your consideration the consequences of a misplaced comma in a contract. Consider the sentence at issue:

"This 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."

At issue is the second comma, the one appearing after "terms." The parties are two Canadian firms, Rogers Communications and Aliant.

On the basis of this sentence, Rogers thought that it had a 5-year deal with Aliant rather than a 5-year deal that Aliant could terminate upon one year prior notice. Aliant decided to end the relationship when the business environment turned a bit south, prior to the expiry of the 5-year term. Rogers refused to honor the early termination notice, and the dispute wound up in front of the Canadian Radio-televison and Telecommunications Commission, the regulator of everything telecom in our neighbor to the north.

Armed with undisclosed rules of grammar, the Commission agreed with Aliant. It ruled that the placement of the comma after "terms" indicated the parties' intent that the contract could be terminated by one year's prior notice at any time, not just after the expiration of the 5-year initial term.

And the cost of this grammatical faux pax? $2.13 Million.

The wise contracts lawyer knows this: every word matters; punctuation matters; proofreading matters. If you don't know how to use punctuation properly for heaven's sake use shorter sentences:

"This Agreement shall continue in force for a period of five years from the date it is made (the 'Initial Term'). Upon the expiration of the Initial Term, this Agreement shall continue for successive five-year terms (each, a 'Renewal Term'), unless and until terminated by one year's prior notice in writing by either party during any Renewal Term."

Not exactly rocket science, this. On the other hand, let the contracts lawyer who has never misused punctuation, never made a typographical error, or never artlessly stated something cast the first stone.

Thanks for blobbing with me thus far.