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Drafting Legal Contracts: “And” and/or “Or”?

The Delaware supreme court recently decided in Weinberg v Waystar Inc that sometimes “and” could mean “or” and “or” could mean “and” in legal documents.  Do Canadian courts agree with this?

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“And” Means “Or”: Weinberg v Waystar

The terms “and” and “or” are typically used as conjunctive and disjunctive terms, respectively. However, the Delaware supreme court rendered a decision in Weinberg v Waystar Inc on March 16, 2023, that “and” could mean “or”. The case involved the interpretation of a contract provision related to the exercise of a call right by the company which required the occurrence of two separate events connected by the word “and”. The question at hand was whether both events were necessary for the call right to be exercised or if one event was sufficient.

In giving his opinion, The Vice Chancellor Glasscock stated, “Bad—unclear—contractual drafting is not rare, in my experience. Of course, as a judge, I see a skewed subset. In any event, bad drafting keeps judges and lawyers gainfully employed. Whether the contractual language here is an example is of no moment; the provision in question is clear (and unambiguous) read in context.” Here, the use of “and” is permissive and several; it describes a pair of periods when a call right may be exercised. Since in context the language is not ambiguous… the Plaintiff’s (Weinberg) motion is denied; the Defendants’ (Waystar & Co) motion is granted.” [i]

Background

During the time Tracey Weinberg was employed at Waystar, the company awarded her stock purchase options in Derby TopCo, Inc. As part of the stock incentive plan, Waystar granted Weinberg three sets of stock options under separate agreements. By the time Weinberg’s employment was terminated 107,318.96 of her stock options had vested. Weinberg exercised all her vested options, which then converted to partnership units in Derby TopCo Partnership LP.

Each of the three option agreements awarded to Weinberg contains a provision granting Waystar and Derby LP the right to repurchase Weinberg’s partnership units (the “Call Right”) within six months of her employment termination and a breach of the restrictive covenant. The issue thus was over the validity of the Call Right exercise under the option agreements in the absence of occurrence of the latter event (restrictive covenant breach).

Do Canadian Courts agree with this?

The Canadian courts over the years have acknowledged the ambiguity of the term “and” and “or”. In Meuser v Meuser, the court stated that, “while the word “and” normally has a conjunctive meaning it has been held to be a semantically ambiguous conjunction with the result that notions which it links may be intended to be regarded jointly or jointly and severally…”.[ii]Also, it has been clear from statutes which include “and” after setting out different requirements that all components must be established in order for such provision to apply.[iii]

However, in various cases “and” has been interpreted to mean “or”. In Unique Broadband Systems Inc, it was stated, “While the word “and” generally imports a conjunctive sense, this is not an inexorable cannon [sic] of construction. In some cases, the word “and” will be interpreted as “or”, in order to make sense and give effect to the contract.”[iv] Also, In Teva Canada Ltd v Novatis AG, Snider J stated that the English word “and” is notoriously ambiguous and generally, it takes its meaning from its context.[v]

While these cases do not definitively hold that “and” can always mean “or”, it does suggest that there may be situations where a court could interpret “and” and “or” in a more flexible way. Especially, in cases where by doing so will avoid absurdities and the true intent of the provision in which the word is used will be carried out. Therefore, it is possible that the outcome of the Weinberg case would have been the same if it were to be decided in Canada.

Conclusion

The interpretation of “and” and “or” in legal documents can be a complex issue which courts have grappled with. However, poor and unclear contractual drafting is not rare. When drafting contracts or other legal documents that use the conjunctions “and” and “or” it is important to be clear and precise in your use of language. This can help to avoid ambiguity and ensure that the meaning of the contract is clear to all parties. Some tips drafters should take into consideration as well:

  1. Be consistent in your use of conjunctions: If you use “and” to connect two clauses, use “and” consistently throughout the contract. Similarly, if you use “or” to connect two clauses, use “or” consistently throughout the contract.
  2. Use clear language: Use language that is easy to understand and avoid complex or technical terms that may be open to interpretation. Also, if you only mean “and” to connect terms or items in a list, do not use general descriptors such as “etc.”
  3. Define key terms: If there are terms in the contract that could be open to interpretation, define them clearly at the outset.
  4. Use of extra words: You could use a few extra words to make your writing clearer and reduce the reader’s workload. For example, if you want to convey a disjunctive meaning (using “or”), you could use a phrase like ‘the occurrence of any one or more of.’ If you want to convey a conjunctive meaning (using “and”), you could use a phrase like ‘if both of’.
  5. Seek legal advice: If you are unsure about the meaning of “and” and “or” in the context of your contract, seek legal advice from a qualified lawyer.

If you have any questions or would like any additional information regarding the above, please feel free to contact us at 1-800-604-1312 or by visiting our Vancouver offices via e-mail at inquiries@segevllp.com.

Disclaimer

***The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances. This blog post does not constitute legal advice or other professional advice and may not be relied upon as such.***

Links

[i] Weinberg v. Waystar, Inc., No. 274, 2022, 2023 Del. LEXIS 88 (Mar. 16, 2023)

[ii] [1998] BCJ No 1614, 40 RFL (4th) 295, 80 ACWS (3d) 1216

[iii] R v Wholesale Travel Group Inc [1991] 3 S.C.R 154, 130 N.R. 1

[iv] 2014 ONCA 538, 13 C.B.R (6TH) 278, 121 O.R (3d) 81, 2014 CarswellOnt 9327 (Ont.C.A)

[v] [2013] FCJ No 182