In this blog post, I described how in certain circumstances you might want to date a contract by having the parties date their signatures rather than by including a date in the introductory clause. I also mentioned how adopting that approach would require that you use a different concluding clause than the one you’d use if you were to state the date in the introductory clause.
But what I didn’t mention is that you’d also be advised to include in the body of the contract something that says when the contract becomes effective. I’ve come up with some language; here it is:
This agreement will become effective when all the parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date stated opposite [or under] that party’s signature) will be deemed the date of this agreement.
I could have made do with the first sentence, but I wanted to ensure that anyone using this language feels comfortable using the phrase the date of this agreement even in the absence of a date in the introductory clause. (Sometime soon I’ll blog about overzealous use of the defined term Effective Date.)
And I didn’t feel comfortable using just the second sentence, as I wanted to make it clear that the contract becomes effective the instant all the parties have signed it, rather than, say, midnight at the beginning of the date all the parties have signed it.
If you can improve on this language, please let me know, because I’d like to be able to use it routinely.
This agreement is effective when all the parties have signed it which is determined by the latest date stated with the parties’ signatures.
(Isn’t a contract ‘always speaking’ so that you do not need to use future tense?)
Maybe I am old fashioned, but this sounds overly simplified and therefore awkward to me.
Cheryl: It’s standard advice that you should always use the simple present because contracts are “always speaking.” But that glosses over some subtleties.
Here’s what MSCD 3.80 says: “Use the present tense for those policies that apply on effectiveness of the agreement (such as [7-2], [7-3], and [7-4]), even though the policy will continue to apply in the future. Also use the present tense for those policies (such as [7-5]) that state a time of effectiveness or lapsing of effectiveness. If, however, the policy relates to future events that may or may not take place, as in [7-1] or [7-6], or the timing of which is uncertain, use will.”
I’m confident that this advice is consistent with accepted usage, but it’s been a few years since I’ve looked into it. I’ll see what my favorite new reference work, The Cambridge Grammar of the English Language, has to say about this.
Also, I’m unsure about the way you combined the notion of effectivess with the notion of date. And while we’re at it, I’d put a comma before which.
But thank you for playing!
Always game, like Geena Davis offering a solution to a puzzle set by Stephen Hawking….
I think that to date contracts as of the date of the signatures can be a mistake. It overlooks what too often happens in corporate environments where contracts are executed remotely; that is, not in the presence of the drafting attorney. I spent several years practicing in house and most of the contracts (from a former regime) stated that their effective date was the date of the last signature. Unfortunately, in 15 to 25% of the cases, one or more parties neglected to date their signature.
One concern I have with the proposed language is that it uses a parenthetical that can introduce a wrinkle. (Didn’t you condemn parentheticals in a later (June 1, 2008) post?) What if the last signatory puts down a date other than the date he signed it? Is the primary text (the date this agreement is signed) controlling, or does the parenthetical text control (as indicated by the date stated opposite that party’s signature)?
Here’s a stab at alternative language:
This agreement will be effective when all parties have signed it. The date of this agreement is the latest date opposite [or below] a party’s signature.
The advantage of this alternative is that a failure of one party to date his signature will not vitiate the dating of the agreement. And if the last signatory uses a different date, the agreement still takes effect when signed, not on the date specified by the signatory. The disadvantage is that the failure of the last signatory to date his signature or his using a different date than the date of his signature will result in the date of the agreement not corresponding to the date the agreement became effective (that is, to the date the last signature was placed on the agreement).
Richard: Touché regarding the parenthetical, but I don’t think I recommended an absolute ban! I’m not too worried about the issue you raise, as the concluding clause makes it clear that the date used should be the date the party in question signed.
Your formulation would avoid any awkwardness due to blank signature dates. But I don’t think blank dates would really represent much of a problem. And if my formulation encourages signatories to actually fill in the blank dates, so much the better.
Ken
Adam, you saved me from myself once again. I was going to have this provision in an agreement, but knowing the client, while a brilliant business person, can be a bit slipshod with details, I will add the date myself attrhe beginning and not worry about if or when they add the date to their signatures.