Like the comedian of old, the lowly comma usually gets no respect.

Back in 2006, however, the Canadian Radio-television and Telecommunications Commission (CRTC) made a decision that shifted one million dollars between two telecom companies based on that very punctuation mark.

The comma in question was found in a contract related to accessing power poles, which, it turns out, are an interesting commodity. Indeed, while they are relatively inexpensive to put up, their use is critical for anyone looking to distribute cable of any type through a locality. Only certain types of companies such as electric utilities have a mandated right to put up such poles on public and private property. In this case, the power poles were located in New Brunswick and owned by NB Power.

Bell Aliant had an agreement to access NB Power’s poles for which it paid an access price. Bell Aliant in turn shared access with Rogers under the agreement in question. As many commercial contracts do, this contract included some renewal and termination clauses. In this case, the agreement provided that it

shall continue in force for a period of five years from the date it is made, and thereafter for successive five year terms, unless and until terminated by one year prior notice in writing by either party.

In the first five year period, NB Power raised the access price per pole significantly for Bell Aliant. Under its agreement, Bell Aliant was not able to pass on such a price increase to Rogers. Therefore, it did the next best thing: it gave notice of its termination of the agreement, thus forcing Rogers to renegotiate for a higher price in a new agreement.

On the basis of the clause mentioned above, Rogers thought that they had a clear 5-year period and that no termination in the first five years was possible. Bell Aliant read the clause as saying they could give a one year notice at any point including during the first 5 years. The parties went to debate the issue in front of the CRTC, which regulates the companies.

In its initial decision, the CRTC paid special attention to the commas in the clause. It stated that the comma before the phrase “unless and until terminated by one year prior notice in writing by either party” means that that phrase qualifies both the phrases “[the 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 the phrase “and thereafter for successive five (5) year terms”. Thus, the Commission ruled that the termination of the agreement could occur at any time, without cause, upon one year’s written notice.

On subsequent review, the CRTC went to the french language version of the contract. It is important to note that even though the parties had not signed the french version, the Commission had approved the french language version when they signed off on the agreement in the first place.

That clause stated:

Sous réserve des dispositions relatives à la résiliation du présent contrat, ce dernier prend effet à la date de signature. Il demeure en vigueur pour une période de cinq (5) ans, à partir de la date de la signature et il est subséquemment renouvelé pour des périodes successives de cinq (5) années, à moins d’un préavis écrit de résiliation à l’autre partie un an avant l’expiration du contrat.

The french version leaves no doubt: the intention of the clause was that there should be an initial period of 5 years and it cannot be terminated earlier. The one year notice can only be given one year before each subsequent 5 year term.

Somewhat curiously, the CRTC then went on to determine it had no authority to regulate the use of power poles and the entire exercise was moot!

There are nonetheless two important lessons to be learned from this case. The first is that comma placement (and presumably other punctuation) in a contract can be important and substantively alter the meaning of a clause. For the reader interested in exploring the wealth of information on punctuation, the book Eats, Shoots & Leaves is recommended. (The cover design of the book provides insight into the importance of the comma in the title.)

The second is that if there are two language versions – a frequent occurrence in Canada – then both versions should be reviewed. Even though the French language is often criticized for having more ambiguities than English, contracts drafted in French are, as a result, generally more precise. Our clause in this article is a good example.

If you are interested in the subtleties of contract drafting, then we suggest you sign up for our upcoming CPD seminars in Toronto and Ottawa.

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