A recent opinion by the Fifth Circuit Court of Appeals serves as yet another reminder that the job description of anyone drafting a contract includes guarding against overreaching by a court. The case in question is Flagship Credit Corp. v. Indian Harbor Ins. Co., 2012 WL 2299484 (5th Cir. June 15, 2012) (copy here). A finance company that was sued in a … Read More
Unsure whether you should be paying someone at the law firm of Preen & Strut $600 an hour to draft your contracts? Or uncertain whether a member of your in-house legal staff is doing a good job with your templates? Well, take the following quiz and all will be revealed! (In the quiz, the phrase “your guy” is gender-neutral.) A … Read More
Via this post on the California Corporate & Securities Law blog, which is maintained by Keith Paul Bishop of Allen Matkins, I learned of the recent Ninth Circuit opinion in WPP Luxembourg Gamma Three Sarl v. Spot Runner, Inc. (go here for a PDF copy). This dispute involved a second amended and restated right of first refusal and co–sale agreement—what … Read More
It’s pretty easy to find instances of a court offering a shaky analysis of ambiguity. I recently submitted to a periodical an article about a head-scratching instance of such misdiagnosis—let’s see if it’s accepted. In the interim, you might want to check out “Ambiguous Drafting and the 12-Pound Cat,” by Jeffrey S. Ammon, a member in the Grand Rapids, Michigan … Read More
I recently learned of a Wisconsin appellate case, Appleton Papers, Inc. v. Andritz, Inc., 2011 WL 867754 (Wis. Ct. App.) It provides an interesting example of the confusion that can follow if you misdiagnose the sources of uncertainty in contract language. The defendant, Andritz, had granted the plaintiff an option to purchase equipment, then had refused to sell at the … Read More
From Eoin O’Dell’s roundup of comma-related mischief on Cearta.ie I learned of a dispute that surfaced at a Chrysler bankruptcy hearing earlier in July. In June 2009, Fiat and the new Chrysler Group LLC agreed to honor all the rights consumers had against the “Old Chrysler” under state “lemon laws.” The agreement was contained in a bankruptcy court judge’s order, but … Read More
A chapter of MSCD is devoted to syntactic ambiguity, in other words uncertainty over which part of a sentence a given word or phrase modifies. One source of syntactic ambiguity is closing modifiers. MSCD discusses how to avoid ambiguity caused by closing modifiers, but it doesn’t discuss in each case (or the wordier in each such case). That’s what I’ll … Read More
A couple of months ago, reader Kent asked me what I thought about using parentheses in contracts. Here, belatedly, is my answer: In regular prose, parentheses (namely round brackets, like those enclosing these words) are used to offset text that constitutes an explanation or aside. The limited and stylized prose of contracts is generally not the place for explanations and … Read More
[Updated 9 March 2021: This post has been superseded by my article Know Your Enemy: Sources of Uncertain Meaning in Contracts, Michigan Bar Journal (Oct. 2016) (here).] [I was prompted to write this post after consulting, over the past few months, dozens of cases ostensibly involving ambiguity but in fact dealing with a range of other problems. I plan on … Read More
A reference on Ideoblog to “sloppy drafting” lead me to take a closer look at the litigation between equipment-rental company United Rentals Inc. (“URI”) and the Cerberus Partners acquisition vehicles RAM Holdings, Inc. and RAM Acquisition Corp. URI sued the RAM entities for having bailed on a $4 billion deal to acquire URI. The RAM entities claimed that URI couldn’t force … Read More
