Counterparts: An Example of Categories-of-Contract-Language Dysfunction

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.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

12 thoughts on “Counterparts: An Example of Categories-of-Contract-Language Dysfunction”

  1. 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?

    Reply
  2. 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.

    Reply
  3. 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

    Reply
  4. 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

    Reply
    • 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

      Reply
    • 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.

      Reply

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.