The cost of bad grammer … er… grammar

The cost of bad grammer … er… grammar

When drafting contracts, it is extremely important to pay attention to all grammatical aspects of the document, particular the placement of punctuation marks. Although, at first glance, this would appear to be a minor detail, incorrect usage of punctuation marks can change the entire meaning of a clause or of a contract.

Drafter’s Tip

The most common punctuation mistakes when drafting contracts occur when a numerical figure is provided. The number 20,000,000 could be read as “twenty million” or “twenty thousand” depending on the jurisdiction. Similarly, the number 20.000 could be read either as “twenty” or “twenty thousand”. For this reason, it is advisable to always follow a numerical figure with the amount written out in words, i.e. “Buyer agrees to pay €20,000 (twenty thousand euro) to Seller”.

A contract dispute between Canadian cable company Rogers Communications and telephone company Bell Alliant in October 206 further demonstrated the importance of a misplaced punctuation mark (in this case, a comma). The contract in that case stated:

"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."

The parties argued about the placement of the second comma. One side stated that it should be interpreted as meaning the contract was good for at least five years, while the opposing party said the comma indicated the deal could be terminated before if one year's notice was given.

Ultimately, a Canadian commission stated the comma should have been omitted if the contract was intended to last five years in its shortest possible term. As a result, Bell Alliant was able to save over $2 million by terminating the deal prematurely. A simple misplaced comma could be worth at least $2 million – something to consider when you are determining whether a sentence is properly punctuated.