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The $5,000,000 Comma

Brian Buck
© Scotwork NA

Had my high school English teacher told me that a comma could cost me $5,000,000, I would have paid far more attention! I’m sure that’s what the Oakhurst Dairy company is thinking after it had to settle a dispute over the placement (or misplacement) of a comma.

How many times do we reach verbal agreements or come to terms with another party but never stop to fully document what we’ve agreed to? It happens more often than you think. In fact, I suspect that had Oakhurst Dairy and its drivers accurately documented the true intent of the exemption clause, Oakhurst Dairy could have potentially avoided the $5M mistake.

How do you know if you are doing this well or not? Take this quick assessment:

  1. What percentage of your deals change scope, price, and/or deal terms when you go from what’s been verbally agreed to contract? (0 to 100%)
  2. What percentage of your deals see fundamental changes to scope, price, and/or deal terms during fulfillment of agreement due to misunderstandings? (0 to 100%)
  3. What percentage of your deals wind up being partially or fully disputed after the agreement has been contracted? (0 to 100%)

Add all of your percentages together. The closer you are to zero the greater the likelihood that you are doing an excellent job at documenting your agreements and ensuring all parties are on the same page. The further you are from zero, particularly if you exceed thirty total percent, you might have an issue with how you document your deals.

Some quick and easy tips:

  • Deal with discrepancies in the room. Once you’ve agreed to a deal, recap what you’ve agreed to and ask everyone if anyone has a different understanding. This gives you the ability to deal with the discrepancy in the room while memories are fresh.
  • Send an email recap. Before going to something more formal, send an email to recap the deal and what you’ve agreed to. Some find this very useful before going to a contract.
  • Ask for clarity. Don’t be afraid to ask for clarity if you don’t understand or don’t feel you’re on the same page with the other party. Better to get clarity now instead of fighting about it later.

Don’t let something like a comma derail your entire deal.

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