Have we had enough of syntactic ambiguity yet? Aside from my many posts about syntactic ambiguity over the years, recent weeks have brought us the Maine serial-comma case (here) and the Georgia campus-carry bill (here).
Now, thanks to this post on ContractsProf Blog I learned about BL Partners Group, L.P. v. Interbroad, LLC, No. 465 EDA 2016, 2017 WL 2591473 (Pa. Super. Ct. June 15, 2017) (here).
Here’s the language at issue:
In the event that Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building, or Lessor elects to demolish the building, Lessor may terminate the Lease upon not less than 60 days notice to Lessee upon paying Lessee ten (10) times the net operating income earned by Lessee from the Advertising Structures or the Premises for the immediately preceding twelve (12) month period.
So, may the lessor terminate if it elects to demolish the building regardless of the condition of the building, or must the building have been damaged by fire or other casualty?
Here’s how MSCD describes this kind of ambiguity:
When in any string of three nouns (as in [41]), verbs, adjectives, or adverbs the first and second are separated by and and the second and third are separated by or, or vice versa, the meaning varies depending on which conjunction “has scope over” the other.
BL Partners shows that in addition to strings of verbs, adjectives, and adverbs, this kind of ambiguity can afflict a string of clauses.
The Pennsylvania Superior Court begins its analysis by citing dictionary definitions of or—always a reliable sign that a court is out of its depth. It goes on to say that “or Lessor elects to demolish the building” is a nonrestrictive clause; I suggest that it is not. But the court then concludes, sensibly enough, that the comma before “or Lessor” doesn’t mean that that clause must be read separately.
Here’s a simplified version of the language at issue: If A and B, or C, then D. The comma before or C and the comma before then D could be interpreted as offsetting, so that then D modifies (1) A and B and (2) C. In that scenario, the or has scope over the preceding and. I suspected that if you asked a group of native English speakers which interpretation they preferred, a majority would choose this one. But just because more readers favor one meaning over the other doesn’t mean that the text in question isn’t ambiguous.
As always, I don’t care who wins fights over confusing contract language; I want to avoid fights. If the drafter thought that the comma before “or Lessor” (in my simplified version, before or C), made the meaning clear, they were wrong. I suspect that the drafter was unaware of the alternative meanings.
I would have used the structure If A and B, or if C, then D. Or If A and either B or C, then D.
I would call the provision a ‘conditional grant of discretion’ or a ‘grant of conditional discretion’, what I think MSCD would call a ‘condition using language of discretion’. I think it’s confusing to speak of the matrix clause as ‘modifying’ the conditional clause.
The provision might be a case where the matrix clause is better put before the conditional clause, along these lines (two versions for two meanings):
1/ Fire Unnecessary. The Lessor may terminate the Lease if either (a) the Lessor decides to demolish the building, or (b) the building is damaged by fire and the Lessor decides not to restore the building.
2/ Fire Necessary. The Lessor may terminate the Lease if fire damages the building and the Lessor decides not to restore the building. (No need to mention demolition as it’s one form of non-restoration.)