A contract may provide that a right or obligation will be triggered by an action of, or receipt by, an "affiliate" of a signatory. Should the term "affiliate" mean only those affiliates that exist at the time of contracting? Or, does it include affiliates that come into existence after the execution of the contract? Or, is the term ambiguous in that it admits of either construction and determination of what meaning the parties intended must be made in an adversarial proceeding?
The Court of Appeals addressed the meaning of the term "affiliate" in Ellington v. EMI.1 Four members of the court joined an opinion that stated that in the absence of language in the contract to the contrary, the term "affiliate" includes only those affiliates that existed at the time of contracting. Accordingly, if the parties wish to include affiliates that would come into existence or were acquired after that time, they must insert specific language to that effect (e.g., "present and future affiliates") in their contract.
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