Counterparts provisions are a mess.
For one thing, it’s not clear what counterparts are. I and others have been under the impression that it refers to a copy of a contract signed by fewer than all parties, but Black’s Law Dictionary says counterpart means “duplicate.” See this Twitter thread for a bit about that.
And whatever counterparts are, the issue raised is in fact such a nonissue that it’s not worth addressing in it a contract. I’ve not found anything suggesting that signing in counterparts can be challenged as making a contract unenforceable. It follows that the only function of the counterparts provision would be to reassure anyone who’s nervous about that. That’s not a worthwhile function.
If you’re not already fed up, there’s also a categories-of-contract-language problem with the standard counterparts-provision language. Here’s an example:
What’s in red is what you usually see. Ah, language of discretion (may)! That means we’re allowed to sign counterparts! Thank goodness! Without this provision, we might be in breach if we were to sign counterparts!
Hardly. Instead, the issue is whether the contract is effective if the contract were signed in counterparts. That’s expressed by the language in blue. So this provision makes two attempts to address the same issue twice, once ineffectually. (See this recent post for another instance of that sort of thing.)
That’s more about counterparts than any mortal should be exposed to.
Am I also correct in that my “source of uncertain meaning” radar was triggered by “when counterparts have been signed” with no qualifier? “All” counterparts, “one or more,” etc.? Or is that not important here?
Yes, but it’s already a mess,and it’s pointless, so no one’s going to care. How that for a cheerful assessment!
:l
I once submitted a countersigned document for recording at the county clerk’s office (a land records office), only to have it rejected when it lacked a paragraph stating that it could be signed in counterparts. We didn’t have the time to argue about it–we simply arranged for compliant signatures–so I never ascertained what authority the clerk was relying upon. I suspect there was no actual authority.
The power of bureaucracy!
Ken:
The more that I think about it, the more pointless it seems. If signing a contract such that each party signs a different copy means — at law — that the contract is not effective, then language in that contract attempting to make it effective is itself ineffective. Is there a rule of law that says that, while a contract with separate signature is not effective, it is if the contract says so? If not, then the language does nothing. Maybe it deters dispute, but that seems pretty wasteful.
Chris
Yep.
Ken, I think worthy issues remain on the table for exploration on this ‘counterpart’ topic.
1/ You correctly state that
(a) no permission is required to sign in counterparts, so ‘may’ is ill-chosen,
(b) the issue is whether the contract is effective if signed only in counterparts,
(c) that issue is gone at by words like ‘This agreement takes effect when each party has signed and delivered a counterpart to each other party’, and
(d) redundancy is bad.
2/ I think the following issues remain:
(a) Are counterparts provisions necessary? That is, are contracts signed only in counterparts effective without a counterparts provision (Dylan O’Reilly’s horror story)? If they’re unnecessary, they’re pointless and should not be used, right?
(b) Are counterparts provisions effective? This is really two questions: ‘Can such provisions override background law, if any, requiring that all signatures be on the same document?’ and ‘How can a counterparts provision be effective before the contract it applies to has taken effect under background law?’ I think this is one of Chris Lemens’s points.
(c) If post-signing delivery is necessary for the contract to take effect, is extra-contractual evidence of delivery necessary for a person to know whether the contract took effect?
3/ The post didn’t address the following issue cluster but it lurks nearby:
What of the practice of (a) removing the signature pages of all signed counterparts but one (that one, the ‘master counterpart’) and (b) affixing the removed signature pages to the master counterpart, making a ‘complete’ counterpart?
Is that fraud or the alteration of executed documents or some other wicked thing?
Is a ‘counterparts’ provision that permits such conduct necessary or sufficient?
If so, how should the provision read? (The speciment provision about faxed signatures doesn’t seem to address the issue squarely.)
What kind of authentication is necessary to put the master counterpart in evidence at a trial or other evidentiary hearing?
If the signature pages were never attached to a counterpart of the agreement until the amalgamation, does that present problems of contract effectiveness or authentication?
How is a judge, jury, or arbitrator to know without outside-the-four-corners evidence that the added signature pages were or were not originally affixed to documents identical to the master counterpart? –Wright
Wright:
I can imagine creating evidence of each signers’s intent by saying something appropriate either right above the signatures as a whole or right above each signature. Like something saying that by signing, the signer also intends that (a) their signature on this particular counterpart be deemed to be a signature on all other counterparts that are identical except that other parties have signed them and (b) anyone may combine the page that they signed to create a copy of the agreement that contains all signatures, so long as that copy is the same as the one signed other than in the signatures. That unilateral language presumably needs no effectiveness, unlike the contract itself.
Chris
I say in the post that counterparts are a nonissue. That’s because there’s no law saying there’s a problem with counterparts (whatever one chooses it to mean). I’ll make that explicit.
If counterparts are a nonissue, and nonissues have no place in contracts, then the fight should not be against redundancy, but against inclusion of counterparts provisions in contracts at all.
Sure.
How would this apply to a lease where there are two guys on the tenant side (with signature lines for each)? Language as follows:
“Counterparts. The parties may execute this Lease in any number of counterparts,
each of which is an original but all of which constitute one and the same instrument.”
In the particular case, my college kid and 5 swim teammates are working on leasing a house for next year. Upstairs and down are two separate premises w/ separate leases. My kid and one other plan to share the downstairs. Well…all of us parents have been discussing the lease and planned to redline/edit a couple sections. But then found the other downstairs kid and his dad have already signed the unmodified version and submitted it, without my kid’s or my signature, or discussing with us. So how does this “counterparts” language with its “one and the same instrument” apply to my kid/me? Are we bound by them having already signed the as-is version? Can we make our edits and submit our own version?
Sorry, not as quick a question as I expected it to be.
Hi. I’m not a landlord-tenant person, and I’m not your lawyer, but who are the parties? If your child is a party and hasn’t signed the lease, then it isn’t enforceable. If you child isn’t a party, then they’re not bound. But I might be missing something.
Hi Ken, thanks for the reply.
My kid is a party; he has not signed. His prospective roommate signed & returned the original version supplied by the landlord (no redlines/edits). Which left me wondering where that leaves my kid. A more thorough reading turned up the “counterparts” language.
My tentative conclusions thus far, informed in part by your remarks:
1) roommate, having signed, is bound by the version he signed
2) my kid, having not signed that, is not bound yet;
3) that we can go ahead and redline/edit, sign that version, and if/when the landlord signs that, he and we are bound by that.
Key thing I’m not sure about is whether the counterparts clause allows joint for tenants signing differing versions…? And if not, then what?
Hi Ken, thanks for the reply.
My kid is a party; he has not signed. His prospective roommate signed & returned the original version supplied by the landlord (no redlines/edits). Which left me wondering where that leaves my kid. A more thorough reading turned up the “counterparts” language.
My tentative conclusions thus far, informed in part by your remarks:
1) roommate, having signed, is bound by the version he signed
2) my kid, having not signed that, is not bound yet;
3) that we can go ahead and redline/edit, sign that version, and if/when the landlord signs that, he and we are bound by that.
Key thing I’m not sure about is whether the counterparts clause allows joint for tenants signing differing versions…? And if not, then what?