Tag: Ambiguity

Posted on

Where in a Sentence Should You Place an Exception? (Plus Observations on the Nature of Contract Language)

I noticed an exchange between D.C. Toedt and Bryan Garner. Because it allows me to address a moderately interesting issue, namely where in a sentence you should put an exception, I permit myself to wade in.

The starting point is this article by Garner in the ABA Journal. Here’s the gist of it:

Keep in mind two principles for creating readable prose: (1) A fair percentage of sentences should begin with short contextualizing phrases, often adverbial. (2) A fair percentage should begin with one-syllable transitional words—normally But, Yet, So or even And.

This advice is entirely standard and unobjectionable, but it has no bearing on contracts. Bryan’s audience is lawyers who are “professional rhetoricians.” That doesn’t include contract drafters: contracts aren’t the place for telling stories or persuading.

Nevertheless, in this post on his blog, D.C. uses Bryan’s article to make this point about contract drafting:

In a contract, it’s less important for the writing to pack a punch than it is for each sentence to make its point quick­ly, precisely, and under­stan­d­ably, so as to help speed up legal review and get the contract to signature soon­er. And that will usually call for the kind of boring, just-the-facts-ma’am style — Alice will do X, Bob may do Y — that Garner urges writers to avoid.

But in applying to contract drafting Garner’s points regarding rhetorical style, D.C. is comparing apples and oranges: it makes no sense. But D.C. avoids facing that because he includes no examples.

Bryan responded with this tweet. In addition to pointing out that D.C. had offered no examples, he says this:

The principle of end weight—putting emphatic words at the ends of sentences to avoid syntactic fizzle—applies almost as strongly to contractual drafting as in other expository prose.

So now Bryan too is comparing apples and oranges. This general proposition leaves me flummoxed.

But Bryan’s tweet includes this photo:

Ah, now we’re getting somewhere! The two examples in this photo don’t address some general point of syntax or rhetoric. Instead, they address a narrow issue: where in a sentence you should put an exception!

Where you put exceptions shouldn’t be a function of emphasis. Emphasizing one part of a sentence over another is at odds with the nature of contract language: it’s analogous to software code, so everything matters.

The primary concern should be avoiding confusion. Consider “Ex. 1” in Garner’s photo. Putting the exception at the end arguable creates syntactic ambiguity: one could get into an argument over whether the exception applies to everything that precedes it or applies to just “free from all tenancies.” If you put the exception at the front, you avoid that uncertainty. So that’s what I recommend: if your exception applies to the entirety of the rest of the sentence, putting it at the front should serve to avoid such confusion. (But in some contexts opening modifiers can result in confusion; see MSCD 12.23.)

You might be able to improve on my analysis, but I feel that I’ve at least salvaged something specific from an exchange that was going nowhere.

Posted on

“Compensation” Versus “Remuneration”

Today I tweeted the following:

It prompted the following tweet from the redoubtable @IPDraughts:

Because tackling this requires more than 280 characters, I permit myself to respond on this blog.

As regards compensation, Mark is playing a game I don’t want to be caught playing, namely “My meaning is better than your meaning!” In fact, Black’s Law Dictionary offers as definitions of compensation both meanings that Mark alludes to:

compensation (kom-pən-say-shən) n. (14c) 1. Remuneration and other benefits received in return for services rendered; esp., salary or wages.

…

2. Payment of damages, or any other act that a court orders to be done by a person who has caused injury to another.

I gather that compensation is mostly used in England to express only the second meaning. But given the promiscuous exchange between American and England, I suggest it would be rash to expect the English understanding to prevail in a given context. Mark pointed me to the following exchange in this 2010 article in The Lawyer about the meeting of American and English cultures at Hogan Lovells, and I think it makes my point for me:

Still, the Americans have won the first lexical battle. Asked about remuneration generally, Harris checks himself. “Oh, we don’t say ’remuneration’ now,” he says, as Gorrell nods in agreement. “We say ’compensation’.” Quite why ’remuneration’ has become a non-word within Hogan Lovells is difficult to work out, but the following day The Lawyer gets some ­clarification. Apparently it boils down to ­accepting the American term, which is “more widely understood as a term around the world, not just in the US”.

You might think I’d be in favor of promoting use of remuneration to express the first meaning and compensation to express only the second meaning, so as to avoid confusion, but in fact I’m not so inclined. The alternative meanings of compensation don’t worry me: unless you’re particularly clumsy, the context in which you use the word compensation would make it clear which meaning you intend the word to have: you should always refer to compensation for something or other.

This ties into my aversion to unnecessary terms of art. Here’s what MSCD 1.11–.12 says:

Lawyers are prone to using doctrinal terms of art in contracts even though simpler terminology is available, rendering those terms of art unnecessary.

For example, in a security agreement, why use hypothecate regarding a security interest? Why not simply use grant? Hypothecate means to pledge without delivery of title and possession. That meaning goes beyond the function required of the verb in language granting a security interest. And that meaning isn’t otherwise necessary, as the security agreement itself will specify what the terms of the security interest are. Hypothecate might have value as shorthand for court opinions or scholarly texts, but that’s very different from what’s required for a contract. Using grant in granting language in a security agreement wouldn’t prevent that grant from being a hypothecation, if the remainder of the granting language is consistent with that meaning. If it isn’t, using hypothecate instead wouldn’t fix that.

In other words, say what you mean to say without relying on the reader to read into your choice of words distinctions of varying levels of obscurity.

It’s just as well that I’m OK with using compensation to express both meanings: I wouldn’t hold out much hope for rehabilitating remuneration, which sounds fuddy-duddy to Americans. I don’t recall encountering it outside of a formal legal document. And it’s not that common in U.S. contracts: only 341 contracts filed on EDGAR in the past 30 days contain the word renumeration.

Posted on

When Litigating Confusing Contract Language, It’s Best to Have a Frame of Reference (Featuring “Stepped Rates” and “Shifting Flat Rates”)

During my blogging-in-my-bathrobe years, I entertained myself by trawling on Westlaw for court opinions dealing with confusing contract language. Good times.

In a fit of nostalgia, this evening I went back to Westlaw and entered a search, saying to myself, Yes, I can still do this! But I’d obviously lost my touch, because I forgot to limit my search to recent cases, so the first case I looked at was Tennessee Excavating Co. v. Morrison-Knudsen Co., No. 01-A–019201CH00010, 1992 WL 113426 (Tenn. Ct. App. May 29, 1992) (PDF here). It was a serendipitous mistake, because it offered the first-ever example I’ve encountered of a dispute over whether a fee schedule involved stepped rates or shifting flat rates.

“Whether a fee schedule involved what?” I hear you say. If you’re not familiar with those terms, it’s because I invented them, having never seen any discussion of the related ambiguity. (To name something is to bring it into existence.) I haven’t done a blog post about the distinction between stepped rates and shifting flat rates. It’s discussed in the fourth edition of MSCD, at 14.64–.70. Paragraph 14.66 will give you a taste:

But this schedule is ambiguous. If the annual gross revenue is $3.4 million, it’s not clear from this schedule whether the 8% rate is applied to all gross revenue (this manual refers to such a rate as a “shifting flat rate”) or only revenue over $3 million, with the lower rates being applied to the increments of revenue under $3 million (this manual refers to such a combined rate as a “stepped rate”).

It’s good to be able to point to an instance of every kind of ambiguity I write about, so I’m pleased that I encountered this opinion. But that’s not why I’m writing about it.

Instead, I noticed that, unsurprisingly, the Tennessee Court of Appeals didn’t mention stepped rates and shifting flat rates in holding that the contract was unambiguous. Instead, it blundered through an analysis that didn’t make sense to me.

One thing MSCD stands for is that if you try to make sense out of contract language that is, or might be, ambiguous and you have no experience with the subject, don’t be surprised if you fall flat on your face. By contrast, anyone familiar with MSCD who is presented with the dispute underlying Tennessee Excavating Co. would understand what’s involved by flipping to the relevant part of chapter 16. And MSCD would provide a frame of reference for explicating the dispute to others, whether in an opinion or a brief.

That’s why judges and litigators who handle contract disputes would benefit from becoming acquainted with MSCD. The foreword to the fourth edition by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery (here) might help spread the word. And so might appellate guy Jason Steed’s recent review of the fourth edition (here).

And obviously, contract drafters too would benefit from being able to distinguish between stepped rates and shifting flat rates.