≡ Menu

Street view of Taco del Sol from Google MapsIn the news:

  • The landlord of a commercial property in Bozeman, Montana received complaints about the noise and aromas emanating from a Taco del Sol restaurant operated by a tenant.
  • The landlord, purporting to act under its contractual right to make rea­son­able rules, asked the restaurant to stop playing music; to install felt on its chair legs; and to install a new ventilation system.
  • The restaurant installed felt on the chair legs but declined to stop playing music. The restaurant also bought equipment to reroute its existing ventilation system, but the landlord prevented its installation.
  • The landlord sent the restaurant a notice of breach and of the landlord’s intent to terminate the lease if the tenant did not take all the measures demanded by the landlord within 30 days.
  • Shortly after the 30-day cure period expired, the restaurant sued the landlord for a de­clar­a­tory judgment (1) that its conduct was not a breach, and (2) that the land­lord had anticipatorily breached the lease agreement by sending the notice of default. (The tenant also moved out, possibly to this location.)

The trial court held in favor of the restaurant and awarded damages. This week, the state supreme court affirmed. See Bridger del Sol, Inc. v. VincentView, LLC, 2017 MT 293 (Nov. 28, 2017).

For another “own goal” tale in the same vein, see the Common Draft annotation on termination.

{ 0 comments }

One wonders whether American Airlines used an outside contractor to develop the scheduling software that is allowing too many pilots to take vacation over the holiday season. If so, then both that contractor and American are probably taking a careful look at the limitation-of-liability provision(s) in the contract and/or in the statement of work.  See Oops: American Airlines Accidentally Let Too Many Pilots Take Off The Holidays, NPR.org, Nov. 29, 2017. (See also the risk-by-risk post linked below.)

UPDATE: CNN is reporting that the cost to American Airlines could be in the range of $10 million, according to a JPMorgan estimate.

{ 0 comments }

Tim Cummins, CEO of the International Association for Contract and Com­mer­cial Management, writes that “Contract success is directly impacted by the motiv­ation of the parties. Research increasingly shows that traditional forms of contract are demotivating and therefore can be directly responsible for under-performance. The way that terms are expressed, the extent to which they mandate specific actions and the degree to which they provide a relational structure are of particular importance.” (IACCM.org Nov. 27, 2017; emphasis added.) Tim cites academic research indicating that:

… [S]ubtle reductions in the specificity of a contract’s language can boost autonomy, which increases intrinsic motivation and improves a range of desirable behaviors.

Nine field and laboratory experiments found that less specific contracts increased task persistence, creativity, and cooperation, both immediately and longitudinally, because they boosted autonomy and intrinsic motivation.

These positive effects, however, only occurred when contracts provided sufficient structure. …

Eileen Y. Chou, Nir Galinsky, Adam D. Halevy, and J. Keith Murnighan, The Goldilocks contract: The synergistic benefits of combining structure and autonomy for persistence, creativity, and cooperation, Journal of Personality and Social Psychology, 113(3), 393-412 (2017) (paywalled; emphasis added).

DCT comment:  I bought and read the Chou et al. “Goldilocks contract” paper; their hypothesis is intriguing and seems right, but their evidentiary support needs more work.

Still, I’m going to look for opportunities to soften imperious-sounding provisions in my contracts, along the same lines as my preference for using will instead of shall or must (for example, “Alice will pay Bob $100” instead of “Alice shall pay Bob $100”), for reasons explained in this post.

{ 2 comments }

 

As an American, I like it that English is the global language, at least for now. Travel and commerce are easier when there’s a common lingua franca; I cer­tain­ly like being a native speaker of the existing world tongue.

But English isn’t easy to master.  English would be more competitive in the mar­ket­place — versus, let’s say, Mandarin or German — if non-native speak­ers could more quickly pick up the basics and feel com­for­table that they were reasonably proficient.

Toward that end, English-language purists who immediately notice “bad” spelling and gram­mar (yes, I’m one of them) should lighten up and accept simpler, easier forms as they naturally arise.  Here are a few examples:

  • Less vs. fewer:  The “correct” form is (for example) fewer people, because the word people is a count­able noun; compare with, e.g., less time.  But all the time I see “incorrect” usage such as less people.  We ought to accept the latter form, because there’s no logical reason that the word less shouldn’t do double duty — it’d be one less thing (!) for non-native speakers to learn, not to mention a bit more intuitive to spell.
  • Who vs. whom:  Let’s just use who for everything, as many do anyway.
  • It’s vs. its.
  • The subjunctive — e.g., if I was a carpenter (“incorrect”) vs. if I were a carpenter.

This brings to mind the likely-apocryphal story of a new college campus whose architects supposedly didn’t design in any sidewalks: instead, they planted grass, waited six months, and then paved over where people actually walked.  Likewise, if we purists want English to continue being the global tongue, we shouldn’t grumble if it evolves to be more serviceable for others.

With one exception:  I still maintain that impact is not a verb (shaddup you kids, get off my lawn) ….

Related reading:

{ 3 comments }

May a landlord terminate a lease just because the landlord has decided to demolish the building?  That might well depend on the lease agreement.  In a Penn­syl­va­nia case, a trial court granted summary judgment in favor of the landlord, but an appellate court reversed and remanded for trial to resolve an ambiguity in the lease agreement’s termination provision. Those expensive legal proceedings might have been avoided at the contract-drafting stage by judicious use of rom­an­ettes — or better still, by breaking up the language to speed up legal review.

The agreement language

Here’s the relevant agreement language:

In the event that Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building, or Lessor elects to demolish the building, Lessor may terminate the Lease upon not less than 60 days notice to Lessee upon paying Lessee ten (10) times the net operating income earned by Lessee from the Advertising Struct­ures or the Premises for the immediately preceding twelve (12) month period.

BL Partners Group, L.P. v. Interbroad, LLC, No. 465 EDA 2016, slip op. at 2 (Pa. App. June 15, 2017) (reversing and remanding summary judgment; non-precedential).  (Hat tip: Stacey Lantagne at ContractsProfBlog.)  Overturning the trial court’s ruling in favor of the landlord, the appeals court ruled that the bold-faced language was amb­ig­u­ous, because it could reasonably be interpreted in two different ways, and therefore a trial was necessary to resolve the ambiguity. See id., slip op. at 1.

Adding clarity with romanettes

Here’s a first possible meaning of the bold-faced language, with romanettes inserted to demark the possibilities:

In the event that (i) Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building, or (ii) Lessor elects to demolish the building, then Lessor may terminate the Lease ….

(Adding the word “then” helps the reader to quickly locate the consequence clause, which I just discovered is called the apodosis.)

Here’s a second possible meaning, with the romanettes rearranged:

In the event that Lessor’s building is damaged by fire or other casualty and (i) Lessor elects not to restore such building, or (ii) Lessor elects to demolish the building, then Lessor may terminate the Lease ….

Just seven extra characters — or 13 extra characters if you count the “then.” They’re cheap insurance against expensive ambiguity disputes.

Even better:  Break up the sentence to ease the reviewer’s job

To make the termination provision even more readable, we could further break up the sentence, as follows (using the second meaning as an example):

(a) Lessor may terminate the Lease in accordance with subdivision (b) in either of the following cases:

(1) Lessor’s building is damaged by fire or other casualty and Lessor elects not to restore such building; or

(2) Lessor elects to demolish the building.

(b) To terminate the Lease under subdivision (a), Lessor must:

(1) give Lessee  not less than 60 days notice; and

(2) pay Lessee 10 times the net operating income earned by Lessee from the Advertising Struct­ures or the Premises for the immediately preceding 12-month period.

Sure, the broken-up sentence would take up more space on the page. But it also would likely be a bit easier and quicker to review — and because contract review is often the biggest bottleneck in getting contracts to signature, it makes sense to try to save time for the reviewer as opposed to saving paper.

{ 0 comments }

On Contracts is Stephen Fry proof thanks to caching by WP Super Cache