A comma can cost you $10 million

When was the last time, you gave a second thought about punctuation? It turns out that the presence (or absence) of a comma, could make a costly difference.

What is the Oxford comma and why does it matter?

The Oxford (or serial comma) is named as such, because it is said to be traditionally used by the Oxford University Press (although its precise origin is unclear).It refers to the comma that is inserted between the last two items in a list of items, to reduce ambiguity.

Take the following sentence, for example:

“I love my children, Elvis and Madonna.”

Without the Oxford comma, it would appear that the speaker is saying that his/her children are Elvis and Madonna. Introducing the Oxford comma as follows, would reduce ambiguity:

“I love my children, Elvis, and Madonna.”

While this may seem unnecessarily pedantic (who cares about commas, right?), this has potential real life implications. In the case of O’Connor v Oakhurst Dairy, a decision of the United Court of Appeals for the First Circuit, the issue was whether employers had to pay overtime pay (worth an estimated $10 million) to truck drivers.

The relevant legislation stated that the employer did not have to pay overtime pay for the following activities:

“The canning, processing, preserving, drying, marketing, storing, packing for shipment or distribution of:

Agricultural produce
Meat and fish product; and
Perishable foods”

The truck drivers were only engaged in distribution activities, but not packing. The question thus turned on whether distribution was a standalone item in the list, or whether it had to be packing for distribution. The court held the lack of the Oxford comma suggested that distribution was not a standalone activity, and reversed the lower court’s decision.

Okay, actually, it is not just all about the comma

Despite the sensational headline, in reality, a court is unlikely to decide the outcome of a case just based on a comma. For instance, in coming to its conclusion, the court had also considered the legislative history and purpose of the provision, and also applied an interpretative technique which presumed that under Maine law, state employment laws were to be interpreted generously in favor of the beneficiary.

Let us now visit some of these principles in the context of contractual interpretation.

Plain and ordinary meaning rule
This may sound rather obvious, but parties often assume that contracts are full of legalese and as a result, they do not pay close attention to the words used. You should also bear in mind that the objective of contractual interpretation is to ascertain the meaning as it would convey to a reasonable person. One useful test is to ask yourself – if someone with no knowledge of the transaction were to read the document, would he/she understand what it means?

Objective principle – Why not just say it?
Where the parties have reduced the terms of their agreement to writing (i.e. the contract), the court is only interested in the expressed intention of the parties as reflected in the contract. The court cannot read parties’ minds and therefore, the subjective intentions of the parties are generally irrelevant. In other words, if you have agreed on something, why not just say it in the contract?

Ejusdem generis / Noscitur a sociis
These rule means that general words are limited by specific words, and that the meaning of a word may be determined by the words accompanying it. For example, in a renovation contract, the contractor may be asked to supply “chairs, tables, cupboards, and other items.” The phrase “other items” would be construed to mean other items of furniture, but not anything else.

Generalia specialibus non derogant
This means that the specific will prevail over the general where there is a conflict. When a provision has been specifically negotiated, such a provision would be given greater weight over any general terms (for example, in a standard form) that may not have been individually considered by the parties.

Reddendo singula singulis
This is also known as the rule of distributive construction, which means that where two or more subjects are being qualified, the qualifiers will apply to the subjects in the order in which they appear. For instance, if you say that “paint or makeup may be dissolved by turpentine or alcohol”, this would be read as “paint may be dissolved by turpentine” and “makeup may be dissolved by alcohol”.

Contra proferentum
The contra proferentum rule is a doctrine of interpretation that states that when a provision is ambiguous, it would be construed against the person who drafted the provision. From a utilitarian perspective, this places the risk of losses on the person best able to avoid the harm i.e. the person who drafted it. It also encourages clearer drafting.

Conclusion

It should be noted that the interpretive principles would tend to be applied only when the text is unclear or ambiguous in the first place. Therefore, it is always recommended that clear drafting be used and you consult a lawyer who can do that job for you.

 

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