Legal drafting: expensive comma--more precision
I wrote yesterday about a contract in which a comma ended up costing one party the deal it thought it had made. I proposed a rewrite of the entire provision in two sentences instead of one:
- This agreement continues in force for five years from the date it is made. After the first five-year term, it continues in five-year terms unless either party terminates it by one-year's prior written notice.
- The initial term of this agreement ends at midnight at the beginning of the fifth anniversary of the date of this agreement. The initial term (including 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.
- He added precision about the ending of the first five-year term ("midnight at the beginning of the anniversary . . .").
- He added precision about the one-year notice period ("no later than one year before . . .").
- He clarified that this section governs all subsequent extensions ("including any extensions in accordance with this section . . .").
Better Legal Writing
Writing for the Legal Audience
6 Comments:
Mr. Adams's blog is an extremely welcome addition to the blogosphere. I look forward to his every new entry as much as I look forward to your every new entry. After looking at his posted revision, I have three points:
First, I don't like the use of "including" because it suggests that the initial term and the consecutive renewals are similar or same concepts when, in fact, I think the drafter wants to keep them separate and distinct. I'd substitute "and" for "including".
Second, I find the "unless no later than one year before" phrasing hard to understand. It strings together a couple of negative concepts and, hence, leaves me wondering whether it says what I think it's supposed to mean. I haven't composed anything better than the "no later than one year before" part of it, but I think the provision could be improved by moving that portion to after "in writing". The end of the provision would then read: "unless either party notifies the other in writing no later than one year before the beginning of any such extension that it does not wish to extend this agreement."
In that manner, the "unless" qualification is immediately followed by a reference to the parties, some action that the parties can take, and the timing required for that action.
Third, and forgive the quibbling, but his revision changes the contract that at least the aggrieved party thought was in place. From what I've read, the parties intended an initial five-year term that would be followed by automatic five-year renewals. During any renewal term (and I realize that it was decided that this part applied to the initial term as well), either party could cut the renewal term short with one-year's notice. Thus, as I read the quotation of the disputed provision, either party could truncate a renewal term at anytime during that term (from Day 1 of Year 1 to Day 364 of Year 4) and the contract would end one year after the notice--short of the full five-year renewal term. As I read Mr. Adams's revision, the parties could terminate the contract (assuming timely notice) only as of a five-year anniversary date of the contract. Of course, I may have misunderstood the terms of the disputed provision.
I have to agree with the anonymous commenter on all three points. Two thoughts:
(1) Why didn't Adams use two commas, like this:
"unless, no later than one year before the beginning of any such extension, either party . . ."
There must be a reason, but I'm not persnickety enough to ask Adams.
(2) The idea that Adams's version allows termination only at the beginning of each five-year term slipped by me until the commenter pointed it out. I, too, think the (intended) original allowed termination at any point after the first five-year term--as long as there was the one-year notice.
This "high-level, professional contract drafter" is wiping small amounts of egg off his face. I agree entirely with anonymous's first point. But I'm not too worried about what prompted his second point. And regarding the third point, I think the original is unclear, and I think my arrangement makes more sense conceptually: it's misleading to give an agreement a term of X years if either party can at any time terminate on one year's notice.
And anonymous shouldn't apologize for quibbling. Much of what I do could be described as quibbling ....
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