Conversations About Customer Contracts Writing with Clarity
Leslie Cernak
BIO :
Leslie Cernak has been involved in the fuel oil industry for more than 36 years , running operations for her own company , and later working in compliance for an energy company . She recently earned a master ’ s degree in legal studies for energy law from the University of Oklahoma , College of Law .
The goal when writing customer contracts is to memorialize the deal to which the parties have agreed . Consequently , contract language must be clear and detailed to accurately convey the intended deal . Prevent ambiguity by utilizing proper format , words , grammar , and punctuation .
Format .
• Organize through the use of sections and subsections , headers , numbering systems , indentation , and / or tabulation .
• The title of the contract must be exactly the same as the name of the contract identified in the preamble .
• Subject matter performance provisions should be placed first in the “ action section .”
• Payment provisions should specify who pays what to whom , when , why , and how .
• If drafting a formula , ensure that calculation works with different variables . If possible , express a calculated amount instead of a formula .
• Exercise caution when drafting evergreen provisions . For example , “ this Gas Agreement continues for a period of five years from the date it is signed , and thereafter for successive five-year terms , unless and until terminated by one-year prior notice in writing by either party .” Ambiguity was created because it is not clear whether “ unless ” applies to the first period or just the successive terms .
Words .
• Use plain English in customer contracts and drop the “ legalese ” ( e . g . therewith , whensoever , witnesseth , etc .). Many states require plain English by statute .
• Use the same words and definitions the same way throughout the contract .
• Use the same words and definitions the same way for related documents . For example , a Propane Gas Agreement should use the same terminology referenced in a Fee Disclosure Form .
• Define industry terms . Words within a contract are taken to be their ordinary popular meaning . Therefore , any word with an industry specific meaning should be drafted into the contract .
• Be clear with the meaning of a sentence when using the words “ and ” or “ or .”
• Special rules govern the use of the words “ shall ” and “ will .” For instance , “ shall ” should be used exclusively to obligate a party to the contract . In the sentence “ the oil burner shall be in good working order before this contract goes into effect ,” the use of “ shall ” is incorrect since an oil burner , being an inanimate object , cannot be a party to the contract .
Grammar .
• Create clarity through proper sentence structure .
• Shorter sentences are easier to read and may be required by state statute .
• Be mindful of syntax and verb conjugation .
• Plurals can introduce ambiguity . In the sentence “ the company will deliver 100 gallons of oil to Bill and Mary ,” it is unclear whether a total of 100 gallons will be delivered to Bill and Mary as a couple or whether 100 gallons will be delivered to each person for a total of 200 gallons .
Punctuation .
• Proper punctuation helps clarify intent ; improper punctuation can be disastrous .
• THE MILLION DOLLAR COMMA . In the case of Rogers Communications Partnership v . Bell Aliant Regional ( Canada 2006 ), Bell Aliant attempted to cancel a contract governing Rogers ’ use of telephone poles . But the argument turned on a single comma in the 14-page contract . The answer was worth one million Canadian dollars ($ 888,000 ). Bell Aliant won based on the “ rules of punctuation .” This is not an isolated case .
In summary , detailed attention to formatting , word choice , grammar , and punctuation is essential when drafting customer contracts . A well-written contract will memorialize the deal while minimizing disputes , outside interpretation , and lack of enforceability stemming from unclear and ambiguous language . Always consult an attorney on legal matters . Happy writing !
Leslie Cernak has been involved in the fuel oil industry for more than 36 years , running operations for her own company , and later working in compliance for an energy company . She recently earned a master ’ s degree in legal studies for energy law from the University of Oklahoma , College of Law . l FON
28 MARCH 2024 | FUEL OIL NEWS | www . fueloilnews . com