I noticed that the recent opinion of the Delaware Chancery Court in Fetch InteractiveTelevision LLC v. Touchstream Technologies Inc. (here) featured the following snippet from the contract at issue: “[FetchIT] shall cure such default within fifteen (30) days or immediately if deemed to be incurable.”
Yes, the number expressed using a word doesn’t match the number in parentheses.
I’ve written about this sort of glitch previously, for example in this 2014 post. So this case gives me another opportunity to suggest that this sort of glitch does happen, that it can make you look foolish, and that it can all end in tears. But MSCD devotes three whole pages to the words-and-digits thing, so I’m not about to rehash it here. Instead, I’m more interested in the following from the court’s opinion (footnotes omitted):
The written and numerical terms are, obviously, in conflict. The record is devoid of evidence to resolve this ambiguity, and I adopt the general rule that the written number controls, it being less likely that a drafting error will occur in a written expression than a numeric one. I note that Delaware has adopted this rule in its Commercial Code, which I find persuasive here. As a result, FetchIT had fifteen days following the Keller letter in which to cure.
Vice Chancellor Glasscock expresses the principle of interpretation accurately. But in saying that it’s less likely that a drafting error will occur in writing one or more words than in writing one or more digits, he doesn’t take into account the context of this case.
If this were a case of a words-and-digits number that features, for example, digits with a number of zeros that is inconsistent with the word version of the number, or digits with a decimal point in a place that is inconsistent with the word version of the number, the principle of interpretation would make sense: it’s more likely that the inconsistency is due to a digit glitch as opposed to the drafter inadvertently writing the wrong words.
But in this Delaware case, we’re not dealing with a glitch in articulating two versions of the same number. Instead, due to an editing oversight at some point in the process of negotiation and review, either the word version or the digits version of the number was changed to an entirely different number and the other version wasn’t changed. There’s no reason to think it was more likely that someone forgot to revise the one or more digits, making the number expressed in a word the accurate one. If anything, it’s generally more likely that the one or more digits are accurate. For one thing, they’re more eye-catching. And the bigger the number, the more tedious the words, the more prone the drafter is to forget about them, and the more prone anyone reading the contract is to ignore them. See this 2015 post about a scary Texas case to that effect.
So sure, one moral of this story is don’t use words and digits to express numbers. Instead, use the word for numbers one through ten and digits for 11 up.
But another moral is that principles of interpretation are frail things. They’re expedient and arbitrary guidelines devised to help courts with the mucky business of making sense of bollixed contract language, and they don’t always work, even if you try to elevate them to the level of scripture. (See this 2012 post about Scalia and Garner’s book Reading Law: The Interpretation of Legal Texts.)
One glaring example of that is the rule of the last antecedent. (See this 2016 post.) Another example is presented by this Delaware case: the general rule that in interpreting numbers words take precedence over digits doesn’t make sense if the inconsistency is due to an editing oversight as opposed to an error in initially stating both versions of the number. That’s not justice.
4 thoughts on “A New Delaware Case Shows When It Doesn’t Make Sense for Words to Take Precedence Over Digits in Interpreting Numbers”
Seems to me that the key is that the court said there was nothing in the record to provide context as to which was the likelier meaning. In that case, I suppose the honest thing to do is to flip a coin, but judges don’t like to do that (I’d be willing to elevate that observation to an ironclad rule of construction). Consequently, they’ll go for any rationale, however spurious, to give them cover for an arbitrary resolution.
On the other hand, if the cure period was so important, why *wasn’t* there anything in the record?
You seem to be arguing, not against the use of default rules, but for improving an existing default rule by narrowing it.
Default rules are in theory salutary because they warn the parties during drafting what carelessness will cost them. They also aid courts in resolving disputes by using neutral rules that were in place before the parties signed the contract.
(I recognize the counter-case that default rules don’t really exist, in part because every such ‘rule’ has an equal and opposite ‘rule’.)
Your suggestion is that a particular existing default rule (words over numbers) is just when an inconsistency has one cause (editing oversight) but unjust when it has another cause (an initial error stating two versions of the same number).
Isn’t that circular, though, in that a court taking parol evidence on how the error came about must first identify the number the parties actually intended? After that, finding out how the error crept in becomes pointless, since why would one who has determined the real number bother seeking facts that bear on whether or not to apply some default rule?
In the end, you seem to be proposing a ‘words/numbers’ exception to the parol evidence rule. Or perhaps the abolition of the parol evidence rule?
You have my argument the wrong way round. And no parol evidence is required: it’s clear from statement of a number which category it falls under.
I think the same. It was likely editing error. l did a such error million times.