In the course of rooting around online, I encountered this 2007 analysis by Morris, Manning & Martin of a Georgia Court of Appeals case, Covington Square Associates, LLC v. Ingles Markets, Inc., 283 Ga.App. 307, 641 S.E.2d 266 (Ga. Ct. App. 2007) [pdf]. Better late than never, let’s look at this case.
It involves a dispute over a shopping-center lease between Covington (the landlord) and Ingles (the tenant). Under the lease, the landlord could bill the tenant for costs associated with maintaining the common area of the shopping center. At issue was whether under that provision the landlord could bill the tenant for part of the cost of hiring a security guard.
Here’s the relevant parts of the contract (I added the bold italics):
6.3 Maintenance. Landlord shall maintain, in keeping with the highest standards of shopping center practice, the Common Areas in clean condition and good repair, including but not limited to: (i) maintaining all signs, landscaped areas, and parking areas and access roads … ; (ii) adequately illuminating the parking areas … ; and (iii) providing adequate security lighting and fire protection for the Shopping Center as required by applicable code or ordinance.6.4 Tenant’s Contribution. Tenant shall pay to the Landlord, as additional rent during the term hereof, Tenant’s proportionate share of Landlord’s costs of operating the Shopping Center and maintaining the Common Areas (the “Common Area Costs”) during the term hereof. … As used herein, “ Common Area Costs ” shall mean the costs and expenses incurred by Landlord in the operation and maintenance of the Shopping Center and the Common Areas, and shall include repairs to the parking areas or other Common Areas, lighting, removal of snow and ice, trash, rubbish and other refuse, general comprehensive liability insurance covering the Common Areas; fire, casualty and extended coverage on the Premises and the Shopping Center … ; and the cost of leasing or the depreciation on any equipment used to implement the foregoing maintenance, but shall not include: any Shopping Center administrative or management fees or the like; the cost of any item for which Landlord is reimbursed by insurance or otherwise; the cost of any additions to the Common Areas pursuant to an expansion of the Shopping Center’s leasable square footage; the cost of any alterations … and other items … properly classified as capital expenditures or which are made in order to prepare space for occupancy by a new tenant; the cost of any initial installations …; legal, accounting and other professional fees; interest or amortization payments … ; leasing commissions, advertising expenses and other costs incurred in leasing or attempting to lease any portion of the Shopping Center; the cost of any services performed specifically for certain tenants of the Shopping Center; the cost of correcting defects in the construction of the buildings … ; reserves for … repair … ; the cost of Landlord’s membership[s] … ; and any political or charitable contributions.
The lower court held that the tenant wasn’t required to pay part of the cost of hiring a security guard, and the landlord appealed.
In an opinion by Judge G. Alan Blackburn, the Georgia Court of Appeals affirmed the lower court’s ruling, reasoning as follows (citations omitted):
[The landlord] argues that the phrase “and shall include” is not limiting, and the omission of security guard costs from the list of particular items that shall be included is not dispositive. [The tenant] argues, and the trial court held, that the maxim “[e]xpressio unius est exclusio alterius [, t]he express mention of one thing implies the exclusion of another,” applies here. Such application would mean that security guard costs were not included in the costs to be calculated by the “Common Area Costs” formula, because they were not enumerated in the list of items that “shall include.” This interpretation is arguably tenuous in light of the fact that, in the same sentence, a separate list of excluded items is given. However, looking to similar language in Section 6.3, addressing maintenance, the lease uses the following terminology: “Landlord shall maintain … the Common Areas in clean condition and good repair, including but not limited to: (i) maintaining all signs, landscaped areas, [etc.]” The use of the phrase “but not limited to” in Section 6.3, and its absence in Section 6.4, implies a different operation of the word “include” as used in Section 6.4, in that it may be read in that context to be a limiting term, similar to “shall consist of.” … If the parties had intended the term “shall include” to mean otherwise, they could have qualified it as they did “including” in Section 6.3.
This reasoning is problematic, as it’s pure magic-wordery to suggest that drafters use including (or includes) in one part of a contract to convey a limited meaning and including (or includes) but not limited to in another part to convey a meaning that isn’t limited. That notion certainly has no bearing on everyday usage, as including is generally regarded as introducing that which is illustrative, rendering redundant but not limited to (and without limitation).
Consistent with that, the only explanation I’ve ever encountered for tacking on but not limited to or without limitation is that it serves to preclude judicial mischief by reinforcing that the list that follows isn’t limited. I’ve never heard a drafter suggest that they use including (or includes) on its own to limit the scope of a preceding class.
It’s utterly routine for contracts to contain both including (or includes) on its own as well as with but not limited to or without limitation tacked on. For example, of the contracts filed as “material contracts” on the SEC’s EDGAR system, the ten most recent that use the word including each use the word in those two ways. It’s a safe bet that anyone who drafted one of those contracts (1) hadn’t noticed that including was used in those two ways in that contract and (2) would have attributed negligible or no significance to those alternative usages.
The contract language at issue in this case shows just how divorced from reality is the distinction embraced by the Georgia Court of Appeals. In section 6.4 of the contract, the core definition of “Common Area Costs” is followed by a list introduced by “shall include,” which is in turn followed by another list introduced by “but shall not include.” If, as the court says, the list beginning “shall include” limits Common Area Costs to the items so listed, that would render pointless the list introduced by “but shall not include.” The latter list makes sense only if the “shall include” list is illustrative!
The court alludes to that awkward fact by saying that regarding “shall include” as limiting “is arguably tenuous in light of the fact that, in the same sentence, a separate list of excluded items is given.” But that’s all the court has to say on this issue—it allows itself to be distracted by the red herring that is inconsistent use of “but not limited to.”
***
A sensible approach to including doesn’t involve pitting my it’s-always-illustrative analysis against those who think like the court in Covington. Instead, your goal should be to avoid any possibility of a fight.
With including, you accomplish that by not using including to introduce a laundry list of obvious member of the class in question. In other words, don’t say fruit, including oranges, lemons, and grapefruit—because there’s no question that oranges, lemons, and grapefruit are all fruit, listing them simply invites a judge to contemplate whether fruit in fact means citrus fruit. Instead, use including to bring within the class in question something that’s lurking on the gray edges—fruit, including tomatoes.
For more on including, see chapter 12 of MSCD or this April 2007 blog post.
[Updated noon April 14, 2010: Mark Anderson’s comment below reminded me that I forgot to mention the one obvious lesson of general application that you can draw from the Covington case: if in a contract you use different words to state the same meaning, don’t be surprised if a judge uses that to make mischief.]
I enjoyed this article. In drafting agreements I’ve frequently thought about this issue with “including.” Using the phrase “but not limited to” is redudant, but it is so commonly used, I feel incorrect in not using it. One thing I must be careful about is being consistent, which is the problem with using “but not limited to” … as it’s natural to use the word “including” frequently, but only think to use the superfluous followup provision here and there in those circumstances where it feels specially required.
Scott: If you read my full analysis of this subject, you'll see exactly how futile it is to tack "but not limited to" or "without limitation" after "including."
And more generally, the only way anyone can improve their drafting is if they're willing to take a deep breath and break longstanding bad habits. The hardest part about changing a bit of traditional language is doing it for the first time. But once you see that the sky hasn't fallen and that with that one change you've made your contracts a little bit easier and your life a little bit simpler, sticking with that change comes easy.
Ken
Like it or not, "expressio unius est exclusio alterius" appears to have a sufficiently firm footing in case law that it creates doubt as to how a bare "including" will be interpreted. You recommend cutting back on illustrative lists, or choosing your list carefully such that the listed items are not, for instance, all of a similar type which is not representative of the entire category. However, often the pressure to insert "including" plus the list comes from something either the client or the other side is particularly concerned to see is covered. One alternative way around that which also avoids the danger in Covington (apparently changing the meaning of a bare "including" by inserting "including without limitation" elsewhere) is to insert a clause somewhere up near the definitions saying something like "'Including' means 'including without limitation'"; that would seem to settle the matter without littering the body of the contract with "without limitation". What is your opinion on that?
Perhaps the comment is off the mark, but the cost of hiring a security guard does not seem related to ” repairs to the parking areas or other Common Areas, lighting, removal of snow and ice, trash, rubbish and other refuse, general comprehensive liability insurance covering the Common Areas; fire, casualty and extended coverage on the Premises and the Shopping Center … ; and the cost of leasing or the depreciation on any equipment used to implement the foregoing maintenance”. The cost for hiring a security guard seems more related to admin and management fees that are excluded.
Ken, Convention over the last 10 years or so in English contracts is to include an interpretation provision along the lines of "including means including without limitation", then only say "including" in the main body of the contract. This way you get plainer English in the main body, and avoid falling into the potential elephant trap of the eiusdem generis rule. Like it or not, there are centuries of case law about this rule. Lewison on Interpretation of Contracts devotes over 7 pages to the rule, citing a couple of dozen cases.
Having said that, many of the cases are about lists generally, and not the specific instance of stating a general obligation following by "including…" Perhaps lawyers worry too much about the meaning of "including", but it is deeply ingrained in the legal draftsman's thinking.
Whatever one's view is on that point, I suggest it is sloppy drafting to have "including without limitation" in some clauses but not in others where "including" is used. Assuming, of course that the same meaning is intended in all cases; if a different meaning is intended, then clearer language should be used to express the different intention. It is like saying "the Company and its Affiliates" in one clause and "the Company and its Subsidiaries" in another clause, where the only reason for the different language is because the clauses were pasted from different sources.
There is another principle of contractual interpretation that one should construe the document as a whole. As Diplock LJ said in Prestcold (Central) Ltd v Minister of Labour [1969] 1 WLR 89, "…if [a legal draftsman] use different words the presumption is that he means a different thing or concept …a legal draftsman aims at uniformity in the structure of this draft." Arguably, this principle might cause the court to interpret the bare "including" as being subject to the eiusdem generis rule, particularly if there are other clauses that use the term "including without limitation". My guess is that the court is more likely to do this if the contract has been drafted by a lawyer than if it has been drafted by a layman, and that it is more likely than not that the court will assume the same meaning whatever form of "including" is used, but I would prefer not to run that risk.
Alex and Mark: If my only objection to "including without limitation" and "including but not limited to" were the fact that adding "without limitation" and "but not limited to" results in extra words, then sure, the sort of provision you mention would be economical. (I refer to such a provision in MSCD 14.7, in the chapter discussing "provisions specifying drafting conventions.")
But my principal concerns aren't related to economy of words. First, there's the problem that saying "including without limitation" does violence to the ordinary meaning of "including." Second, and more importantly, using a provision specifying drafting conventions as a boilerplate means of ensuring that "including" is given the same meaning, whatever the context, has not found favor with all courts. In MSCD I cite a couple of cases in which a court has said, in effect, "We don't care about your stinking 'without limitation," we hold that "fruit" means "citrus fruit."
Tricks that aim to save the drafter from thinking are no cure-all. That's why I recommend that instead the drafter limit use of "including" to those instances where it might otherwise be unclear whether a given item is included in the class in question.
Alex, I'm familiar with the situtation where the client is concerned about making sure that a particular kind of item is included in the general class. In such situations, I first of all attempt to find some way of stating the general class in a way that makes the client comfortable that the item in question does indeed fall without the general class. For example, the client might be concerned that bathtubs do indeed constitute bathroom fixtures and so don't need to be singled out. Maybe given the nature of the assets in question, the best fix would be instead to refer to the general class as "porcelain bathroom fixtures."
If you can't come up with a way of addressing the general class that makes the client comfortable, then I'd be reluctant to resort to using a list of obvious items after "including," because of the risk that a judge would use the list to limit the scope of the general class. And I know from the caselaw and from how language works that "including without limitation" can't be relied on as a fix. And the longer the list, the greater the risk.
So instead I'd use some other formula. For example, if the client is particularly concerned about bathtubs because the bulk of the assets are bathtubs, I might instead say "bathtubs and any other bathroom fixtures, whether made of metal, porcelain, or both."
Mark, thanks for reminding me of the more general lesson of this case, which is that if you express the same meaning using different words, you're inviting a judge to make mischief.
And like any rule of construction, the presumption that different words convey a different meaning is useful unless it isn't. Given the expediency that prevails in the transactional world, inconsistency is a fact of life.
Ken
Ken:
There is another lesson in the text you cite from the contract: These sentences are way too long! I suspect that the court would have been more inclined to the landlord's argument if the verbs "mean," "include," and "exclude" had been in different sentences. Something like this:
“Common Area Costs” means the costs and expenses incurred by Landlord in the operation and maintenance of the Shopping Center and the Common Areas. Common Area Costs include repairs to the parking areas or other Common Areas. Common Area Costs exclude any Shopping Center administrative or management fees or the like.
I'm not saying that would have avoided the issue entirely — just that it would have helped.
It would also have made this provision much more readable.
Chris Lemens