Contracts: Say What You Mean, and Mean What You Say

Posted by Charles H. Van Horn on

The next time you are presented with a contract for your business, read it carefully. While this seems like a “state the obvious” kind of rule, there are other not-so-obvious reasons why a precise and careful review is important too. Before discussing, let’s state the obvious.

The Must Do’s

Of course, you’ll review the monetary terms to be sure each party is clear about the money and goods or services that will change hands.

Of course, you’ll keep an eye out for default provisions — in other words, what happens if one of the parties does not perform. That could include what equals a default and/or what legal remedies exist if there is a default, including litigation in court, or arbitration. And, in that event, can you recover attorneys’ fees?

Of course, you’ll focus on other principle terms.

Contracts & the Oxford Comma

But, of importance: Do not forget to read the contract it for its literal meaning. Sound simple or too elementary? Think again. With a special and belated thank you to Mrs. Hinchey, my 5th and 6th grade English teacher — I remind you of the Oxford comma.

The Oxford (also called the serial) comma is the final comma in a list of things. Some writing style guides demand its use while others do not. In the sentence below, the Oxford comma comes right after ‘documents.’

Please review the pleadings, documents, and depositions. 

However, in the AP Style used by newspaper reporters, the Oxford comma is not required (see below).

Please review the pleadings, documents and depositions. 

And, here’s one more silly example:

I love my parents, Kermit and Miss Piggy. (My parents are a frog and a pig?) Or: I love my parents, Kermit the Frog, and Miss Piggy.

You’re thinking — so what?  Well, here are $5 million worth of reasons why it matters. To claim underpayment for several years of work, dairy drivers used the Maine Legislature’s very own sloppy grammar to make their case.  Yes – the lack of the Oxford comma provided enough uncertainty to allow the drivers’ overtime claims to proceed and they settled for $5 million!  Since the court’s decision, the Maine Legislature quickly fixed the statutory language and the lawyer for the driver conceded that the presence of the Oxford comma “would have sunk our ship.” Read the complete story here.

As a business owner, it is imperative that you maintain your focus on the material parts of any contract.  But, do not overlook the importance of a detailed analysis of all provisions in a contract. The smallest of details may turn out to have the largest (unintended) impact. Godspeed, Mrs. Hinchey.