Make sure contract really says what you think it says

Contract Language. By Steven M. Harris, AMNews contributor. May 3, 2004.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Often the meaning of sentences or entire paragraphs can be materially changed by inserting or deleting a single word or punctuation mark. Sometimes, however, provisions found in contracts require wholesale changes to adequately reflect the intentions of the parties.

I recently reviewed a contract that contained perhaps the single most egregious example of a party missing the mark while attempting to express a concept. A literal reading of the words was so far off target that I found myself hardly believing the practice could honestly expect the recruited associate physician to sign the contract. Here is the proposed language:

"7.1 Reimbursement of Expenses. If this Agreement is terminated for any reason, Employee shall reimburse and pay Employer any amounts paid by Employer to or on behalf of Employee pursuant to this Section 7, Section 5, and otherwise, including without limitation expenses for malpractice coverage, licensing, application and certification fees, in connection with the employment of Employee in the following amounts: (a) 100% of all such expenses if this Agreement is terminated for any reason within 180 days of the commencement of Employment; (b) 75% of all such expenses if this Agreement is terminated for any reason between 180 and 270 days after the commencement of Employment; and (c) 50% of all such expenses if this Agreement is terminated for any reason during the Employment Term after 270 days from the commencement of Employment. Employer shall have the right to deduct any such amounts due from Employee under this Section 7.1 from Employee's compensation under this Agreement."