The Million-Dollar Proofreader

May 01, 2018

Jonathan Crystal

CFO, Crystal & Company

“Yes, punctuation really matters.” And, no, that’s not just an argument with my teenager over his homework.

Here are some recent reminders of how much is at stake when it comes to accurate contractual and insurance policy language:

Going back a few more years, we see that a single comma, word or clause can put billions of dollars at risk:

In the teeth of the 2008 financial crisis, the merger agreement between Bear Stearns and JP Morgan inadvertently included a clause that “required JPMorgan to guarantee Bear Stearns’ liabilities even if shareholders voted down the deal.” JPMorgan CEO James Dimon was reportedly “apoplectic” after learning of the clause...”
In the insurance industry, too, imprecise language can result in disputes with potential consequences in the billions of dollars: “Who will rebuild lower Manhattan and how quickly could hang on a single word: ‘occurrence’. This is a technical insurance term. At issue is whether the two aeroplanes crashing into the World Trade Centre's twin towers represented one occurrence, insured for $3.5 billion, or two, insured for double that amount.” (A jury later ruled that it was only one occurrence.)

Trust is Good, Skepticism is Necessary