Whoops! What I Really Meant to Say Was...
Law.com details a fascinating story of a deal that went south and every transactional lawyer's worst fear -- testifying in court about what you meant about a clause when it was drafted. In this case, the dispute is over something that we all do, agreeing to some ambiguity in a clause because it "preserves wiggle room" down the road or, frankly, is necessary to get the deal done.
Here's the interesting section from the article, "Kevin Rinker, a Debevoise & Plimpton partner who practices in the area of private equity and who presented a case study of the deal to his fellow partners, agrees with this analysis. From the testimony, he says, it appears Ehrenberg won a point during the negotiations but then failed to clearly articulate it in the contract. Kenneth Adams, a former Jones Day and Winston & Strawn lawyer who now advises law firms on contract matters, goes a step further. "It was a major failure of drafting," he says. "What happens if and when someone walks is a do-not-pass-go issue." Lawyers familiar with the deal say they believe the United Rentals case offers a glimpse into a little-noticed but common practice: Deal lawyers often agree to contracts with ambiguous language for the sake of compromise. Whether this is what happened here, or whether Ehrenberg simply made a mistake, is unknown, but the lesson is clear. "Notwithstanding the pressures of the deal, you really have to think hard about every provision," Rinker says." http://www.law.com/jsp/article.jsp?id=1209047604522
I think the bottom line is that we all will continue to live with ambiguity. Very few clients in the licensing context are willing to pay to iron out all the ambiguity from a contract, but the lesson in the above clause is the critical one, it's important to think about the consequences of the ambiguity and opt in to the ambiguity instead of letting it go. Anyone trying to figure out whether legacy content licenses grant "digital rights" or "mobile rights" knows exactly what I'm talking about.
