Singularity Law

Teaching a course of technology contract drafting, I am often confronted with students who wonder why we spend so much time on the minutiae. The common question is “Does any of this really matter?” While I assure them that it does, there are not a lot of good, practical examples to show them. That’s why I was pleased to get an email from a good friend and technology law expert L.J. Kutten, who pointed me to a Wall Street Journal blog entry showing how serious a seemingly small drafting error can be.

According to the facts, Rogers Communications, Inc., a Canadian cable company, entered into an agreement with Aliant, Inc. to string Rogers’ cable lines on telephone poles for an annual fee of $9.60 per year. Rogers intended to have a contract with a minimum five year term at a fixed rate with five year renewals. The renewal periods were to be subject to a one-year notice of cancellation.

The contract language said 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.”

Aliant gave notice of termination during the first five year period. Rogers objected and the parties ended up before the Canadian Radio-television and Telecommunications Commission (CRTC). Aliant, armed with a book on proper English grammar, argued that the second comma made the termination provision applicable to both the initial and the subsequent renewal terms, not just the renewal terms. The CRTC agreed. “Based on the rules of punctuation,” the comma in question “allows for the termination of the [contract] at any time, without cause, upon one-year’s written notice.”

Aliant has proposed a rate increase from $9.80 per pole per year to $28.05 per pole per year, costing Rogers more than $2.13 million more than expected.

Should the regulators have relied on an English grammar book to find the meaning to be unambiguous, or should they have looked behind the contract at the intent of the parties? Should parol evidence have been admitted to show the intent of the parties?

One contract drafting expert had this to say on the issue:

“The CRTC’s analysis seems pedantic, in that it would be unreasonable to assume that drafters grasp the implications of every comma. But as a way of resolving a dispute, consulting a few books on punctuation is certainly quicker than delving into the intent of the parties. * * *

“The drafter would have been better off rewriting the provision. Here’s my version: ‘The initial term of this agreement ends at midnight at the beginning of the fifth anniversary of the date of this agreement. The initial term (including any extensions in accordance with this section 12) will automatically be extended by consecutive five-year terms unless no later than one year before the beginning of any such extension either party notifies the other in writing that it does not wish to extend this agreement.’”

And the questions on any transactional attorney’s mind — Does the careless use of a comma constitute malpractice? And will the law firm that represented Rogers in this contract negotiation be representing Rogers again in the future?

A consistent litany is that law students do not know how to write. Unfortunately, colleges are moving away from having students write lots of essays — it takes too much time to grade them. Instead, schools are moving more toward short-answer and multiple choice exams, even in English courses. My son graduated from a very good university only a few years ago with a degree in English and even he lamented that there were so few classes in which he was asked to write a paper.

If students don’t learn how to write in college, should it be up to law schools to teach them how to write? And if not law schools, should it be up to law firms to teach them how to write?

The dearth of writing opportunities (other than final exams) in law schools is leading many schools to include drafting courses in their curriculum. The course I teach, for example, requires both in-class and take-home writing assignments each week. It is a pain in the neck to grade all of those assignments, but it is satisfying to see most of the students improving their writing throughout the course. By the time they get to their last writing project, they are comfortable writing contract clauses, and most of them do an extremely credible job in drafting a full agreement. Indeed, the work they do is often better than what I saw coming from young associates when I was in private practice.

But, of course, a single, three hour class over 14-weeks is not going to solve the writing problems facing law firms. And it is not going to prevent the problem presented in the Rogers case from arising again in a different context.

The fact is, lawyers are pretty good writers in general, but are not grammatical experts. It is unreasonable to a court or government agency to focus on an issue of punctuation that probably only a few lawyers would even realize is a problem.

Where there are two possible interpretations of a contract clause, no matter what some expert grammatician says, the trier of fact should look behind the text to determine the party’s intent. That is the only way to do justice.