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Punctuation Marks on Commercial Contracts: A Matter of Costing Millions?

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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comercial contracts, legal news today, UAE legal news

Punctuation marks may be trivial, yet they play a crucial role in the clarity and effectiveness of written communication, particularly in commercial contracts. The proper use of punctuation marks can give sight to the legal interpretation of contractual terms, prevent ambiguity and confusion, and even save clients from losing their money.

One of the most important uses of punctuation marks in commercial contracts is to separate and define clauses and sub-clauses.

Similar to English, Arabic, which is the national language of the UAE, uses a variety of punctuation marks like commas (or even Oxford Commas), semicolons, and colons to ensure that each term is understood in its appropriate context. This scenario is important where legal documents are often lengthy and complex, with multiple clauses and sub-clauses that can easily be misinterpreted.

Analysis of the Common Law Countries

Considering the traditions of the Common Law countries such as the UK, Canada, and Australia, commercial contracts are either construed or interpreted not based on the intention of the respective parties to a contract, but on the meaning of the context provided in the said contract. This is where the interpretation of a punctuation mark on a contract can make an enormous influence; can cost even millions! The Oakhurst Dairy case is a delightful matter that gave the Oxford Comma the importance it deserved, along with paying an amount of 5 Million Dollars to the aggrieved drivers.[1]

However, unlike the system followed in the Common Law countries, the provisions of the Federal Law No. 5 of 1985 on the Civil Transactions Law of the United Arab Emirates State (the “Civil Code”) aim only at interpreting the contract based on the intention of the parties.

Article 265 of the Civil Code states that:

1-“When the wording of a contract is clear, it cannot be deviated from in order to ascertain by means of interpretation the intention of the contracting parties.”

2- “Where the contract has to be construed, it is necessary to ascertain the common intention of the contracting parties and to go beyond the literal meaning of the words, taking into account the nature of the transaction as well as that loyalty and confidence which should exist between the parties in accordance with commercial usage.”

Based on the above provisions and the decisions made before the Court of Cassation, if the contract's wording is clear and obvious, there shall be no such deviation from that precise wording to another.

Similarly, suppose the expression is plain and does not represent the intention of the parties. In that case, the judge may carry out the interpretation, despite the plain meaning of the expression, as mentioned in Article 265 (2) of the Civil Code.

Concerning the interpretation of punctuation marks, Article 258 of the Civil Code states that purposes and meanings in contracts are decisive, not the wording or its formatting, unless it is impossible to construe them according to their true meaning.

The proper use of punctuation marks is critical in commercial contracts for the UAE market can prevent ambiguity, clarify legal terms and reflect the tone and style of a contract. To avoid misunderstandings and costly legal disputes, parties should ensure that their contracts are punctuated and accurately translated, into English and Arabic.

Currently, the principle of interpreting punctuation marks in commercial contracts in the UAE is yet to be discussed or even considered by judges, depending upon the nature of transactions.

For any legal queries or information, contact ask@tlr.ae or call us on +971526443004

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