Costly Drafting Errors, Part 1—Rogers Communications and Aliant

I have a particular interest in the real-world implications of indifferent drafting, so I’ve been contemplating doing an occasional series on drafting screw-ups that make the news. I was prompted to inaugurate this series by Bryan Sims, who was kind enough to point out to me this article from today’s issue of the Canadian newspaper the Globe and Mail regarding a costly instance of confusion over punctuation.

The Dispute

In 2002, Rogers Communications Inc., a Canadian telecommunications company, entered into a contract with Aliant Inc. (now Bell Aliant Regional Communications) in which Aliant agreed to string Rogers cable lines across roughly 91,000 utility poles in the Maritimes for an annual fee of $9.60 per pole. But early in 2005, Aliant informed Rogers that it was terminating the contract and increasing its rates. Rogers objected, on the grounds that the contract couldn’t be terminated until the spring of 2007. Aliant, on the other hand, was of the view that the agreement could be terminated with only one year’s notice.

The sentence at issue stated 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.”

The dispute reached the regulators with the Canadian Radio-television and Telecommunications Commission (CRTC), who sided with Aliant, saying that “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.”

Rogers was evidently mortified, and it objected that it never would have signed the contract if it had known that the contract could be cancelled on such short notice. And its lawyers argued that the parties’ intent should prevail. But the CRTC disagreed, and as a result Rogers will likely end up paying about $2.13 million more than it had expected.

My Analysis

I can see why the CRTC reached the conclusion that they did. The comma after from the date it is made wouldn’t have been necessary had the sentence ended after successive five year terms, so (the argument would go) its only function could be to semantically link the phrase for a period of five years from the date it is made to the phrase unless and until terminated by one year prior notice in writing by either party.

If the comma after from the date it is made had been omitted, a court applying the Rule of the Last Antecedent would have held that only thereafter for successive five year terms was linked to the closing phrase.

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.

How would I have drafted the provision in question? The ambiguity derives from a closing modifier (see MSCD 8.135), but the solutions proposed in MSCD 8.135 don’t work in this case, in part because the temporal sequence of the two elements means that you can’t reverse their order.

And enumeration by itself can’t rectify the ambiguity caused by the trailing modifier, in that the trailing modifier wouldn’t be isolated in one enumerated clause. (See MSCD 8.124.) Consequently, it wouldn’t help to state that the agreement “shall continue in force (1) for a period of five years from the date it is made and (2) thereafter for successive five year terms, unless and until terminated by one year prior notice in writing by either party.”

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 term of this agreement (consisting of the initial term and 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.”

As Bryan Sims suggested when he notified me of this story, breaking the provision into two sentences is the best way to avoid any ambiguity.

But note that my version provides for something that the parties might not have intended—to prevent a five-year extension, a party would have to notify the other party at least one year before that extension is due to begin. (Rogers and Aliant may have had in mind that you could give one year’s notice any time during an extension.) It’s misleading to provide for a term of X years yet allow either party to terminate without cause before the end of the term.

The one fix that I would not recommend is simply deleting the comma after from the date it is made. If the meaning of a contract provision could be significantly altered by adding or omitting a comma, you’re probably better off rephrasing it.

Submissions Welcome

Now that I’ve inaugurated this occasional series, I encourage you to submit to me examples of drafting errors that have made the news, whether recently or in the dim and distant past. Ideally they’d provide fun for armchair drafters. (Not all drafting-error stories meet this criterion—I’m thinking of the recent Alston & Bird story.)

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.