Avoiding a Fight Over “Or”: Thoughts on a Recent Ontario Case

It’s been a while since I’ve done a blog post about or. Well, the drought is now over, thanks to readers who alerted me to the opinion of the Court of Appeal for Ontario in Rooney v. ArcelorMittal S.A. (here).

What was at issue was the language of a statute, not a contract. Specifically, section 131(1) of the Securities Act, which provides as follows (emphasis added):

a security holder may, without regard to whether the security holder relied on the misrepresentation, elect to exercise a right of action for rescission or damages against the offeror or a right of action for damages against [directors and signatories]

The appellants had sued the offerors in question and their respective directors and signatories. The respondent argued that the appellants were required to elect whether to sue the offerors or their respective directors and signatories. The Superior Court sided with the respondent.

The Court of Appeal reversed, of course. The semantics underlying the Court of Appeal’s decision are discussed at length in MSCD. (If I say so myself, chapter 11 of MSCD is the most thorough discussion in any literature of this kind of ambiguity, which I call “ambiguity of the part versus the whole.”)

But winning a fight on appeal is a pretty great example of a Pyrrhic victory. You don’t want such victories; instead, you want to avoid fights altogether. Obviously, in this case the litigants weren’t responsible for the wording of the Securities Act. But if in a contract you mean one or both of X and Y, then say that.

(For other posts about this kind of ambiguity, search on this blog for “ambiguity of the part versus the whole”.)

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.