How Grammar and Commas Can Change Contracts

The marriage between contracts and grammar is necessary in order to understand what the parties rights are under those contracts. So here’s today’s grammar/contracts question: how would you interpret the following sentence?

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.

Does it mean: (A) the termination provision applies only to the initial five-year term; or, (B) the termination provision applies to both the initial five-year term and the renewal? Be careful here, your decision will swing one million Canadian dollars to one of the two companies in this dispute, either Rogers Communications or BCE, more commonly known as Bell Canada. One other alternative may be that the termination provision applies only to the renewal.

Here’s a clue: the interpretation may turn on either how it reads in French or a legal grammar rule known as the “rule of the last antecedent.” So far, the regulators ruled in favor of Bell Canada, which wanted an early termination of its contract with Rogers. In response, Rogers filed a 69-page declaration regarding the use of commas, arguing that the termination modified only the renewal five-year term.

As drafted, the modifier seems to apply to the initial term and the renewal. Perhaps the best way to find out what it meant is to ask the lawyer who wrote it, however.

Side note here: there’s no love lost between these two companies, who have been at each other for some time. They’re using commas as swords.

[thanks to dizznbon and May It Please the Court via cc]