I noted with interest an article entitled “Including Without Limitation” (in this issue of The Transactional Lawyer), by Stephen L. Sepinuck of Gonzaga University School of Law.
I’ll discuss later in this post the part about including without limitation. But let’s start with what is for me the more interesting part—the last two columns, in particular the following description of collateral:
All of Borrower’s red fruits, including, without limitation, tomatoes.
Does the collateral include tomatoes that are entirely or partly a color other than red? Here’s how Sepinuck states the issue:
[A]n “including” clause that follows general language subject to a modifier can be ambiguous. In some cases, the “including” clause describes something that satisfies all the preceding language, even the modifier; in other cases the “including” clause merely gives an example of something that fits within the unmodified language. To decide which interpretation prevails, one must consider the purpose of the clause.
This is an issue I hadn’t considered before. Sepinuck suggests that the more natural reading is that tomatoes that aren’t red would not constitute collateral. I agree.
A comparable example is any American automobile, including any truck or minivan. Sepinuck says that with respect to this example, Justice Scalia said that “minivan” would most naturally be read to cover only American trucks and minivans. See Massachusetts v. E.P.A., 549 U.S. 497, 557 (2007). Again, I agree.
And consider this example offered by Sepinuck:
[A]s the D.C. Circuit recently noted, if an ordinance prohibited “all disruptive activity in the park, including the playing of loud music,” the playing of loud music would be an example of “disruptive activity,” not merely of an “activity,” and would be prohibited without the need to established that the loud music is disruptive.
Sepinuck distinguishes this example from the red tomatoes example by saying that “the ‘including’ clause in this example contains the word ‘loud,’ which apparently substitutes for the adjective “disruptive” in the general language that precedes the ‘including’ clause.” Yet again, I agree—the word loud suggests that loud music already incorporates the equivalent of disruptive. (Sepinuck actually misquotes the court: the examples used was “All disruptive activity is prohibited in the park, including the playing of loud music.” See Epsilon Elecs., Inc. v. United States Dep’t of Treasury, Office of Foreign Assets Control, 857 F.3d 913, 922 (D.C. Cir. 2017). The verb between “disruptive activity” and the including clause eliminates any possible ambiguity. But we’ll stick with Sepinuck’s version because of the issue it raises.)
Now let’s consider a variant I dreamed up: all disruptive activity in the park, including the playing of music. I suggest that even with the word loud omitted, the more natural meaning is that one wouldn’t have to establish that the music was disruptive—any music would be disruptive.
Why might a reader interpret this example differently? I suggest it’s due to the nature of the adjective. Let’s consider again three of the above examples:
- All of Borrower’s red fruits, including, without limitation, tomatoes.
- any American automobile, including any truck or minivan
- all disruptive activity in the park, including the playing of music
In the example in the second bullet point, the word American might be ambiguous—presumably there are different bases for attributing to a commercial good the quality of being American—but it isn’t vague. Leaving aside the possibility of degrees of American-ness based on the provenance of components, a good is either American or it isn’t.
In the example in the first bullet point, red is vague—at what point does red shade into purple or brown? But the quality of being red is an objective fact, with the only uncertainty being a function of edge effects. (Until someone more knowledgeable than I tells me what it’s really called, I’ll call this “edge vagueness.”)
In the example in the third bullet point, disruptive is vague, but not like red is vague. Whether a given activity is disruptive is a function of context, not objective fact. (I’ll call this kind of vagueness “context vagueness.”) I suggest that because disruptiveness is harder to pin down, the reader is inclined to reduce the uncertainty by not assuming that to constitute disruptive activity, you have to distinguish between disruptive music and other kinds of music.
To summarize: If a noun modified by an adjective is immediately followed by an including clause containing a noun that isn’t modified, the more natural reading depends on the nature of the adjective. If it’s not vague or if it exhibits edge vagueness, the more natural reading is that the noun in the including clause is modified by the preceding adjective. If it exhibits context vagueness, the more natural reading is that the noun in the including clause is not modified by the preceding adjective.
Although it might be of interest to linguists and litigators, this ambiguity is deadly for anyone who drafts or reviews contracts—eliminate it. To that end, here’s what Sepinuck offers as an alternative to the example in the first bullet point:
All of Borrower’s red fruits and all of Borrower’s tomatoes.
Here’s an unambiguous version of the example in the second bullet point:
any American car, American truck, or American minivan.
And here’s an unambiguous version of the example in the third bullet point:
playing music in the park or acting disruptively in the park
But these alternative versions might be unrealistic. If one were to consider the broader context, a more comprehensive reworking might be in order.
While I’m at it, something else in Sepinuck’s article caught my attention.
Sepinuck says that without limitation and its variants “are almost assuredly unnecessary.” He then says this (citations omitted):
For this reason, at least one contract drafting expert recommends that they not be used. But that advice is probably quixotic. Transactional lawyers are notoriously reluctant to alter their forms and customary language, even when they might cause mischief. The words “without limitation” are harmless, so there is little reason to drop them from “including” clauses.
The expert in question is yours truly; he cites this 2007 blog post. For what it’s worth, I disagree with his assessment.
My advice is quixotic? Sepinuck misunderstands my purpose. I’m all in favor of everyone dropping without limitation and its variants, but it’s not as if I’m looking to win a popularity contest. My stuff is for anyone who sees value in drafting clearly instead of perpetuating the dysfunction of traditional contract language. As far as I’m concerned, if even one person follows my advice, it’s not quixotic.
And without limitation and its variants aren’t harmless. For one thing, people fight over how they affect meaning. See MSCD ¶¶ 13.359–.367. They add unnecessary extra words, including the pointless internal rule of interpretation saying that including means including but not limited to, or something equivalent. And they add inconsistency, with drafts routinely containing instances of two or more of including; including without limitation; including but not limited to; and variants.
So I say the heck with without limitation and its variants. I dispensed with them perhaps 15 years ago, and I haven’t missed them since. That’s a function of how you use including, something discussed in MSCD and this 2017 article. (My co-author was Vice Chancellor J. Travis Laster of the Delaware Court of Chancery. I can’t imagine anyone describing Travis as “quixotic.”)
In any event, I’m pleased Sepinuck brought the red fruits example to my attention.
4 thoughts on “Another Kind of “Including” Ambiguity”
If you were quixotic, I wonder who would be your Sancho Panza?
Interesting discussion of examples. Another one is:
Indirect or consequential losses including loss of profit.
Are lost profits that constitute direct losses covered by this wording? I would say not, but I suspect there may be differing views.
That’s a hot-button version of this ambiguity: thank you for pointing it out!
My Sancho Panza? Well, it’s certainly not Vice Chancellor Laster. Incidentally, I suspect that the overwhelming majority of people who know who Sancho Panza is are (1) over 50 and (2) educated outside the US.
On your consequential loss example, a 2018 Canadian case that I assailed Ken with (Dow Chemical Canada v Nova Chemicals Corp) demonstrates how Nova’s ‘differing view’ cost them in excess of $1bn Cdn. Ouch.
Interesting thought. It’s pretty hard to avoid modifier ambiguity. But that is why I would hesitate to change an including phrase into a list. Lists are rife with potential for such ambiguity.
And in some one of the redrafts, he creates a redundant list. When faced with a redundancy, a court mindful of the rule against surplusage may lead a court to stare into the ether to determine the true meaning of the redundant text. This is darned hard to predict.
Those redrafts might well work, but depending on the context, they may include worse ambiguity. And there’s a simpler way to fix the problem: repeat the modifier:
*All of Borrower’s red fruits, including red tomatoes.
*Any American automobile, including any American truck or American minivan
*All disruptive activity, including the playing of disruptive music, in the park.
We’ve discussed this before. But thanks for pointing out “including without limitation” and it’s variants are redundant. For goodness sake, look up the caselaw. How often does a court have to hold that the word “including” is a word of enlargement and not of limitation before it sinks in?
As for the few cases that hold otherwise, the drafter almost always uses a cover-your-butt phrase, such as “without limitation.” And the court ignores it.
There’s another potential problem. If you use “including without limitation” in one place in the contract and “including” by itself in another, you have just invited the judge to draw a distinction between the two forms. And this distinction is rarely intended. I’ve reviewed many a draft that did this. My guess is that it is on account of cut-and-past contract drafting.