The case of the million dollar comma

2006 dispute between Rogers Communication (a cable company) and Bell Aliant (a telephone company)

Use of more than 90,000 utility poles scattered across Canada’s easternmost provinces

Issues: How long is the duration of the contract? Can Aliant cancel its contract with Rogers at any time, even before end of the term?

Background facts

Date of execution of the contract between Rogers and Aliant: May 31, 2002

“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.”

New Brunswick Power Distribution and Customer Service Corporation (NB Power) actually owned the poles, not Bell Aliant.

2004: NB Power terminated its contract with Bell Aliant.

October 2004: NB Power began invoicing Rogers for the use of its poles at a rate of $18.91 per pole per year.

The problems begin …

January 31, 2005: Bell Aliant provided Rogers notice of termination of the 2002 agreement, effective February 1, 2006.

Rogers filed a suit with the Canadian Radio-Television Telecommunications Commission, saying that Bell Aliant could not terminate its contract without cause prior to May 31, 2007.

Bell Aliant terminates the contract

Opposing interpretations

Rogers

Contract was good for at least five years, from May 31, 2002 to May 31, 2007.

Contract will automatically renew for another five years, unless either party cancels the contract before the start of the final 12 months.

Bell Aliant

Contract can be terminated even before May 31, 2007, as long as one year’s notice is given.

“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.”

Bell Aliant’s reason: The second commafirst commasecond comma

First ruling of the CRTC

Citing the “rules of punctuation,” CRTC ruled in favor of Bell Aliant. The placement of the second comma allowed Bell Aliant to end its five-year agreement with Rogers at any time with notice.

Final ruling

CRTC ruled in favor of Rogers, citing that the French version of the contract provided clear evidence that the parties intended to restrict termination without cause to the end of the term.

Who won the case?

Kenneth Adams (lecturer at the University of Pennsylvania Law School)

Kenneth Adams, a lawyer specializing in drafting of contracts and lecturer at the University of Pennsylvania Law School, says:

Confusing, cryptic and barely intelligible agreements cost companies time and money and, in the worst-case scenario, can deprive them of their rights.

Skilful redrafting using standard English generally cuts about 25 per cent of the words without losing any of the substance and leaving what remains “vastly clearer”.

Using standard English in contracts

“The initial term of this agreement ends at midnight at the beginning of the fifth anniversary of the date of this agreement. The term of this agreement (consisting of the initial term and any extensions in accordance with this section) 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.”

“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.”

Adams’ version of the disputed contract in standard English

Exercise: rewrite the million dollar comma sentence

“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.”

One idea, one sentence:

1. When will the contract start?

2. How long is the initial duration of the contract?

3. Can the contract be renewed?

4. Can either party terminate the contract? How?

Why legal contracts are convoluted and oftentimes unintelligible“Because any given transaction will closely

resemble many previous transactions, and because lawyers tend to be risk-averse and wary of change, as things stand contract drafting is essentially an exercise in regurgitation. Add to that the specialized nature of contract language—it’s akin to a cross between regular writing and computer code—and it’s not surprising that business contracts are riddled with redundancies, archaisms, misconceptions, and other drafting glitches.”

A Financial Times article quotes Prof. Adams as saying:

“The dirty little secret of the Anglo-American drafting style that dominates global transactions is that nobody drafts contracts from scratch.”

Serial comma(Oxford comma)

Peterson vs. Midwest Security Insurance Company,Supreme Court of Wisconsin (2001)

“Smith ordered bacon, eggs and cheese.”

“Smith ordered bacon, eggs, and cheese.”

Using the serial comma never creates ambiguity; leaving it out sometimes does.

The power of a comma“Should Lawyers Punctuate” by Richard C. Wydick(The Scribes Journal of Legal Writing, Vol 1, 1990)

Fifth Amendment, US Constitution

“[No person shall] be deprived of life, liberty, or property, without due process of law . . .”

The comma after “property” tell us that the phrase "due process of law" modifies the verb “be deprived”.

Without the comma after “property,” it would permit a lawyer to argue (in defiance of the provision’s long history) that “without due process” modifies only “property.” Thus, the fifth amendment would forbid deprivation of property without due process and would absolutely forbid both incarceration and the death penalty.

Comparing the 1987 Philippine Constitutionand the US Constitution

Fifth Amendment, US Constitution

“[No person shall] be deprived of life, liberty, or property, without due process of law . . .”

1987 Constitution, Article III, Bill of Rights

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.