Absent A Written Agreement To The Contrary

In a paragraph of the agreement dealing with payment, the mining company agreed to pay production royalties based on the amount of material it extracts. In the paragraph that covered production royalties, it said: “Notwithstanding provisions to the contrary, the lessee shall pay to the lessor a minimum annual production tax of US$75,000.” Id. at 472. The paragraph adds that if production royalties are less than $75,000 in a given year, the mining company would make a catch-up payment at the end of the year. The court also found that another paragraph states that the costs of production “on the basis of the removal [of the materials]. housing. Id. at 474. The “notwithstanding” clause does not appear to have gone beyond that language. Other less interesting parts of the agreement also pushed the court to conclude, and the landowner lost. In these cases, lawyers often resort to a phrase such as: “Regardless of the contrary provisions contained therein.” Then they add the particularly large supply that requires a specific structure.

This usual writing technique invites trouble. This means that the treaty could say two different and inconsistent things. The reader might read the wrong reader and rely on it, because he thinks the parts were really serious. If the reader does not read the entire document, he could miss the layout that really governed and replaced the wrong one, the one the reader believed. The court ruled in favor of the mining company and concluded that “this only concerns sales relating to production royalties.” The Tribunal pointed out that the phrase “Notwithstanding” was published in the middle of a long paragraph on production royalties. It was not a separate paragraph elsewhere in the agreement: “If the provision was intended to make a minimum payment, which was due each year on the anniversary of entry into force, it would be expected that this would be presented separately.” Id. at 473. If there is no meaning in saying “unless otherwise agreed”, how fantastic should it be to say “without a written agreement between the parties that explicitly imposes positive contrary obligations for this transaction”? Most written contracts have a lot of moving parts. Sometimes, at the end of negotiations, the parties agree on something that may differ from something else they have previously approved. They put the new provision in the document and want the provision to replace anything inconsistent in the document. Basically, this principle suggests that, unless otherwise reasoned, we give competing hypotheses the same priorities.

The dispute boils down to the sentence that began to fall in the middle of sales on production costs, “Notwithstanding any provisions to the contrary contained therein.” What did that mean? If it were the whole deal, the mining company owed $75,000 a year, no matter what. But if “here” only referred to the sale on production royalties, in the absence of mining, there was never any liability for production license fees and, therefore, the mining company was not required to pay the minimum production license royalty. . . .