Corporate & Securities Law

?Except As Otherwise Specified in this Agreement?

By Ken Adams

As reported on ContractsProf Blog, the phrase except as otherwise specified in this agreement featured in newscaster Dan Rather’s contract with CBS. It also featured in a New York appellate court’s opinion in CBS’s appeal of the trial court’s refusal to dismiss Rather’s breach of contract claim against CBS.

At issue was the interplay of two contract provisions. Here’s the pertinent part of the opinion:

Supreme Court erred in finding that subparagraph 1(g) modified the “pay or play” provision when it ignored the initial prefatory clause to the rest of that subparagraph, which states “[e]xcept as otherwise specified in this Agreement.” As the defendants correctly assert, the seven words are crucial because they require subparagraph 1(g) to be read together with the “pay or play” provision, and thus, subparagraph 1(g) cannot modify the “pay or play” provision to mean that CBS must utilize Rather in accordance with some specific standard by featuring him in a sufficient number or types of broadcasts.

If two courts come to different conclusions as to the significance of except as otherwise specified in this agreement, that’s a sign that you might want to find some other way to articulate the interplay of two provisions.

Except as otherwise specified in this agreement says, in effect, “This provision might well be trumped by some other provision of this contract.” (It’s the counterpart of notwithstanding anything in this agreement to the contrary, which means “This provision may well trump some other provision of this contract.”) You’d make things clearer for the reader if you were to point the reader to whatever other provision overrides the provision in question.

Full post as published by AdamsDrafting on September 30, 2009 (boomark / email).