Most business owners think signing a contract is a ceremony.
What really matters is what we agreed on and the handshake.
But on the day a dispute arises, the person who decides was not in the room.
All they have is the page.
So how much is every word on that page worth? And sometimes, every comma?
1. Can a comma cost 5 million dollars?
In 2014, delivery drivers for Oakhurst Dairy in the US state of Maine sued for overtime pay.
The law there exempts from overtime employees engaged in a list of specific activities, and the list included the words "packing for shipment or distribution". With no comma before "or distribution".
The dairy argued: distribution is a separate activity unrelated to packing, the drivers only distribute, so no overtime.
The drivers argued: the meaning is packing, whether for shipment or for distribution, and they do not pack anything.
In 2017, the Court of Appeals ruled that the wording was ambiguous, and therefore decided in favor of the drivers.
In 2018, the dairy paid 5 million dollars in a settlement.
And the legislature? It amended the law. With semicolons.
2. Is what is clear to you also clear to the other side?
In 2002, the Canadian telecom company Rogers signed a contract with Aliant to use utility poles, at 9.60 dollars per pole per year.
Rogers was sure it had at least five years. In 2005, Aliant gave notice of termination on one year's notice.
In 2006, the Canadian regulator ruled in favor of Aliant. The reason: a single comma, under which the contract could be terminated at any time and not only at the end of the term. The cost to Rogers was estimated at 2.13 million dollars.
In 2007, the same regulator reversed its decision, because in the official French version of the contract, the same sentence allowed only one reading.
Why is this interesting?
Two large companies read the same sentence in opposite ways. And the argument was no longer about what they meant, but about punctuation.
3. And in Israel?
In Israel, the question of how to interpret a contract has occupied the courts for decades.
In 1995, in the Apropim ruling, the Supreme Court held that to understand a contract, one looks at the words, and also at the circumstances and the intention of the parties.
Since then, this rule has undergone quite a few changes, in case law and in legislation. And the debate over it has not ended.
But one thing has not changed:
When the parties disagree about what they meant, the starting point is always the page.
And every word that is not written clearly becomes a claim that someone will have to prove in court.
4. And what about you?
If this year you signed or renewed an agreement with a supplier, customer or partner, try a ten-minute exercise:
Open it and read the payment clause and the termination clause as if you were the other side, on the day they are looking for a way out.
Every sentence you read twice, the other side's lawyer will read twenty times. Over coffee.
And if you got stuck on a comma and are not sure what it is doing there, congratulations. You have found the most expensive clause in the contract.
What does a comma cost? Usually nothing. Until the day someone argues about it.