Gordon R. McKenzie








LEGAL GROUNDS - LIBRARY

THE $759,000 COMMA - By Gordon R. MacKenzie

With the compositional precision of my Grade 7 English teacher, Ontario's Superior Court of Justice struck down AMJ Campbell Inc.'s request to have the court amend a contract to remove a comma between the words "freight" and "rebates." The result cost AMJ $759,000. (AMJ Campbell Inc. v. Kord Products Inc.)

AMJ was finalizing the details of the sale of its $13 million container manufacturing subsidiary to Kord Products Inc. Kord's lawyers requested several changes to the contract including adding the famous comma in a clause calculating the purchase price. The change was made and the revised contract was approved and signed.

After the deal closed AMJ realised the comma's cost and sued to have the contract corrected arguing that they did not know the comma was added. The court ruled that it would not rectify the contract, because AMJ, like everyone else, is liable for the documents they sign even if they did not take the trouble to read it. For its part, Kord had not acted improperly by requesting the change or assuming AMJ knew about it since AMJ's lawyers made the change. As well, the court would not correct the contract if the result would not make sense and there were no "freight rebates" in the business being sold.

AMJ's plight is a vivid reminder to us all that if we don't read what we sign, we could get stuck with some unpleasant consequences.

This article is presented as general information only and is not to be relied on as legal advice. You should contact your lawyer to see how the law applies to your circumstances before any action is taken.




 
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