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“And” could mean “or,” says Delaware supreme court in Weinberg v. Waystar – how drafters could avoid the issue

The setting: A company’s option-agreement form allowed the company to repurchase the relevant ownership interests “during the six (6) month period following (x) the (i) [t]ermination of [the employee’s] employment with the [company] for any reason . . . and (y) a Restrictive Covenant Breach.” (Emphasis added.) The company tried to exercise its repurchase option after an employee left, but the employee countered that the repurchase right would be triggered only if both the employment ended and the employee breached a restrictive covenant.

The holding: The Delaware supreme court — after extensively reviewing state- and federal case law — affirmed the chancery court’s holding; the supreme court concluded that in context, the word “and” in the option agreement was equivalent to “or”; that is, it was disjunctive, not conjunctive. See Weinberg v. Waystar, Inc., No. 274, 2022 (Mar. 16, 2023).

Drafting lesson: This costly litigation could have been avoided if the drafter(s) had used a few extra words to reduce reader workload to get a disjunctive, “or” meaning:

  • “during the six-month period after the occurrence of any one or more of the following: (x) the (i) [t]ermination of [the employee’s employment … and (y) a Restrictive Covenant Breach.”

Or to get a conjunctive, “and” meaning:

  • if both of the following have occurred, then during the six-month period after the latest such occurrence: (x) the (i) [t]ermination of [the employee’s employment … and (y) a Restrictive Covenant Breach.”
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