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Oxford and Collins say that past tense can be used while reporting something that is still true at the time of reporting. But then it contradicts with the Implicature of Discontinuation rule.

R saying to S, 'I told N that my Grandfather was a good person, and asked him not to say anything more.'

(In this I have said Grandfather was, even though, he is still alive. Is it correct?)

If it is, then when I say, 'Bill was the founder of Microsoft.' This should also be correct? But some people have said to me that this sentence implies Bill is no more.

And I have found out that it is because of Implicature of Discontinuation.

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Let me tread delicately in some tricky territory.

Simply stated, there is a problem that arises when a statement about the present is reported. A famous example is:

He says (that) the world is round.

The question is, because the world remains round, whether this should be reported in indirect speech as:

He said that the world is round

or

He said that the world was round

Because we all know that the world remains round, it's possible to use either construction without causing any confusion.

However, ambiguity arises when there is no such certainty.

If you have to report Tom's declaration that he is tired, do you say:

He said he is tired

or

He said he was tired.

The former implies that he is still tired and the latter leaves it open.

The answer is that it depends on the context. If you were responding to someone who didn't hear Tom clearly, you would prefer the former.

If you were being asked the following day what Tom had told you, you would prefer the latter.

Between the two is a grey area in which you have to decide which tense is more appropriate.

To say that Bill was the founder of Microsoft might or might not imply that Bill was dead, depending on the context and construction of the sentence.

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    Good answer. I just want to add that most native speakers accept the ambiguity in these statements and figure out the meaning from context. For example, it's rare to hear something like, "He said he was tired" without some context, "Did you ask Ted if he was coming to dinner with us?" "Yes he said he was tired and doesn't feel like going". Here it's clear that Ted is currently tired, but either way it's not very important. – Andrew Mar 8 '18 at 22:06

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