A lawyer aims at precision that can never be achieved because of the bluntness of his tool – language.  Consider the word “including”.  Is it a term of enlargement or limitation?  It is a term of enlargment when the intent is to provide a non-exclusive list.  It is a term of limitation when the intent is to limit the scope to only those items listed.

According to one California Supreme Court case, it is usually the former but sometimes can be the latter.  People v. Western Airlines, Inc., 42 Cal.2d 621 (1954).  Lawyers often try to address this ambiguity by including in contracts a provision such as “whenever the words ‘include’, ‘includes’, or ‘including’ are used in this Agreement, they shall be deemed to be followed by the words ‘without limitation’”.

However, the adoption of such a rule of construction does not always forestall litigation, as was illustrated by the recent case of Weyerhaeuser Company v. Domtar Corp., 2014 U.S. Dist. LEXIS 103563 (D. Del. July 30, 2014).  This dispute involved whether an acquiror (Domtar Corp.) was liable for workers compensation claims by certain retired workers.  Applying the rule of construction (which was included in the agreement), the court reasoned as follows:

Section 2.03(a) broadly transfers all liabilities to Domtar except those explicitly retained by Weyerhaeuser in Section 2.03(b).  Subsections 2.03(a)(i)-(xi) are merely illustrative and do not limit the Newco Liabilities beyond what is expressly retained by Weyerhaeuser in Subsections 2.03(b)(i)-(x).  Liability for workers compensation claims of Retired Workers is not expressly addressed by Subsections 2.03(b)(i)-(x).  Therefore, liability for workers compensation claims of Retired Workers falls within the Newco Liabilities assumed by Domtar, and Weyerhaeuser has demonstrated a breach of an obligation imposed by contract.

The etymology of the word “include” does suggest a sense of limitation.  It is derived from the Latin words in and claudere, meaning to shut in.  The word “closet” has the same derivation.

Proposition 49 Challenge Is Refused

In this post, I mentioned a recent challenge to Proposition 49 filed by the Howard Jarvis Taxpayers Association.  Yesterday, the Court of Appeal denied the tax group’s petition.