Contract Drafting

Home / Services / Contract Drafting

The $2 Million Dollar Comma

This Canadian case highlights how important a simple comma can be, let alone ensuring that you use the correct words. So what happened? A, a party to the contract wanted out of the contract: more than $CAD2m was at stake.

The Clause in Question

In dispute was the interpretation of a termination clause. The relevant clause was as follows:

This agreement shall be effective from the date it is made and shall continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms”,” unless and until terminated by one year prior notice in writing by either party.

The key comma is highlighted in “quotes” above.

A argued that because of the placing of the comma either party had the option to terminate the contract by giving notice of 1 year, and it didn’t matter if that notice was given during the first 5 year term or in any subsequent 5 year term.

The other party R, argued that neither party could terminate in the first 5 year period, but that in any second (or further) term of 5 years either party could terminate by giving notice of 1 year.

The Result

The resulting court case was a veritable linguistic interpretation feast with the Rule of the Last Antecedent being quoted more times than we have seen sunrises. So how did it end up, well at first instance the Commission found for A, deciding that A’s interpretation was the correct one.

However R appealed and then won, because they were able to rely on a French version of the contract (the parties had signed both English and French versions of the contract) and the French version had clearer language in it and no such comma in it. Lucky for them!

So what’s the lesson here?

Punctuation and wording in any contract is very important – it pays to get it right, because getting it wrong can’t have disastrous effects! As the T shirt says:

“I love cooking my family and my dog. Use commas. They save lives”.

Enough said.

The Contract Drafting Process Explained

Contact Us

Call us or send us a contact form telling us the type of contract you need

Phone Call

If you sent us a contact form we will call you to discuss you enquiry

Quote

We will provide you a firm fixed price quote within 12 hours of our call

4 Business Days

Once you accept the quote we will create your contract within 4 business days (you can get it faster if you need)

2nd Version

Once we receive your answers we will provided you with the second version of the contract which should be 95% to 100% complete and accurate!

Answers

Answer the questions and send the contract back to us

Questions

Your contract will include questions in the draft contract for you to answer

90% Accurate

Your contract will be 80-90% complete and accurate when we send you the first draft

Repeat If Necessary

If your contract is not quite perfect we will repeat steps 4, 5 and 6 until you are happy

Stats

98% of contracts are finalised after 3 rounds of edits and 99.5% are finalised after 4 rounds of edits (only 1 contract we drafted in the last year took more than 4 rounds of changes)

Got a Contract Question?

Send us the contract with your questions or requirements. We will then provide you a fixed price quote to answer your questions, or to provide a general review of the contract.

  • This field is for validation purposes and should be left unchanged.

Our Videos

Video
video play

 

How do you know if you have entered into a contract?

This video will give you more details about a legally binding contract. Should you require more information please click here or call us at 1800 355 455.

Video
video play

 

How to Terminate a Contract?

Planning to terminate a contract? This video sets out the process for how you can terminate a contract. If you need more information, click here or call us at 1800 355 455

Video
video play

 

Don't sign that Employment Agreement!

Do you need to sign an employment agreement? Don’t do it until you understand these three points. Learn more here or call us at 1800 355 455 for more information.

Video
video play

 

What is Rent a Chair Agreement?

Looking for more information about rent a Chair Agreement? This video will answer most of your queries. Click here to learn more or call us at 1800 355 455 if you need help.

Video
video play

 

What are the Types of Employment Contracts in Australia?

There are many different types of employment agreements in Australia. To find out which you need, click here or call us at 1800 355 455.

Video
video play

 

Can you Use an Image without Consent?

This video will tell you if you can use the image of a person in a photo to promote your business. Learn more here or call us at 1800 355 455.

Our Happy Clients

Happy with our Services? Engage us again? Happy to vouch for us?

Monsido
Space Now
Burhor

Reviews