Here are two concluding clauses:
The authorized signatures for MICHIGAN and COMPANY below signify their acceptance of the terms of this AGREEMENT.
IN WITNESS WHEREOF, the parties have indicated their acceptance of the terms of this Agreement by their signatures below on the dates indicated.
In both these concluding clauses, the parties say they’re accepting the terms of the contract. That’s unnecessary: signing a contract is sufficient to indicate assent.
I don’t even think it’s worthwhile to remind of the parties that a contract is binding. If someone doesn’t know the effect of signing a contract, they shouldn’t be let near a business contract.
For the same reason, I don’t use the phrase intending to be legally bound. See this 2012 post.
But sometimes you have to include something about acceptance. For example, an employee separation agreement I prepared recently included this: “that he understands and voluntarily accepts the terms of this agreement.” It’s required by statute; forgive me if I can’t recall the details.
I offer no opinion regarding what it’s appropriate to say in consumer contracts.
Going back a few generations, lawyers were more concerned about the formalities of execution, particularly with certain types of deeds such as powers of attorney, wills, affidavits, etc. I remember a former supervising partner referring to the jurat, testimonium, etc and looking these terms up. “Accepting” sounds to me like a throwback to that era.
A few comments:
1/ Both specimen provisions make clear that it is by signing–and by no other means–that the parties signify their assent to the contract. I don’t see that as surplusage where a court might without it infer assent from conduct. Such provisions might even be insufficient to keep a party from being bound by a ‘contract’ it didn’t sign. Some term sheets and memoranda of understanding have provisions by which signing indicates an intent *not* to be legally bound.
2/ Off topic, I notice as food for thought the different tense in each specimen. In the first, signatures ‘signify’ acceptance (simple present). In the second, the parties by their signatures ‘have indicated’ acceptance (past perfect).
Either is defensible, but I prefer the simple present; it speaks as of the instant of contract formation, like lead-ins (‘the parties *agree* as follows’) and granting language (‘Acme hereby *grants* Widgetco a licence’).
Neither specimen uses the MSCD-recommended present progressive (‘are signing’), the case for which (‘represents a statement in anticipation of a transitional event’) would require lead-ins to say ‘the parties are agreeing as follows’ and granting provisions to say ‘Acme is hereby granting Widgetco a licence’.
3/ Getting more or less back on topic, I would abolish the concluding clause and let its very modest office be performed by the effectiveness provision in the body of the contract, along these lines: ‘This agreement takes effect when all parties have signed it, and its date is the date next to [or below] the signature of the last signer to sign it’. I would also add a few words to the lead-in, with this result: ‘By signing this agreement, the parties agree as follows’.
I don’t think point 1 holds up to analysis: if the parties haven’t signed, but have indicated their agreement by conduct, the wording isn’t going to prevent a court from so concluding (where the law admits of an oral contract); and if they have signed, any other form of consent is irrelevant.
The last sentence of 3 seems rather appealing.
You’re probably right about point 1, but do you go so far as to say that there is *no* possible language that could make signing essential to contract formation?
Put otherwise, could a court ever correctly hold (put cynicism about courts aside) that ‘the parties’ conduct has manifested their binding assent to this unsigned document, except for the provision that the only effective form of assent is signing, which provision this court declines to enforce’?
Well yes, of course, because an unsigned contract is–ta-da!–an oral contract, and a court/jury must always determine what the terms of that contract are from the words and actions of the parties. The court/jury could easily conclude that the oral contract was everything in the unsigned written contract except the requirement for signature.
But, an unsigned contract, regardless of the parties’ actions in performing obligations under that contract, may not satisfy the statute of frauds where an agreement has to be in writing and signed by both parties in order to be enforceable. The oral contract might be enforceable, but perhaps not for the entire duration of the written agreement had it been signed by all parties.
To the original point, I generally simply put “Agreed” above the signature blocks in my contracts. It may be unnecessary, but it’s not overly burdensome either, and I can’t see that it causes any harm.
‘Agreed’ above the signature blocks seems duplicative of the lead-in, but neither explicitly says agreement is manifested by *signing*, as the traditional testimonium did: ‘In witness whereof, the parties to these presents have hereunto set their hands and seals’.
In modern phrasing, that means ‘to evidence (‘witness’) our agreement to the above provisions, we have signed this instrument’.
Ken would not modernize the testimonium, but ban it, on the ground that it is so blindingly obvious that signing manifests agreement that it is a waste of pixels to say so in the contract.
As is so often the case, he may be exactly right, but I see value in an ‘assent is shown by signing’ provision. It’s analogous to the thoroughly modern ‘no agreement without a full agreement’ provision in collective bargaining ground rules. If I’m wrong, it’s four needless words in the lead-in.
(Point #3 in response to “By signing this agreement, the parties agree as follows”)
Signature of a contract inherently expresses agreement to the terms of the contract signed; on the date in which the recipient signed. As such, any further language is unnecessary to explain the inherent legalities of that signature. It stands to reason that adding such language may actually cause more confusion than clarification, specifically in regards to the terms of the contract.
Ok I totally agree with what you are saying but there needs to be a closing line. I stumbled upon this article when searching for an alternative ending to a contract which must not have witnesses. So IN WITNESS WHEREOF was out of the question. The next generic ending would be “WE DO HEREUNTO SET OUR HANDS ON THIS DEED ON THIS ___ DAY OF ___” but since there are two parties, they won’t be signing it on the same day so the date also needs to be excluded.
How do you suggest one should end it? Simple signature serves the purpose but without a
concluding paragraph (sentence?) it looks somewhat incomplete.
I’m in favor of some minimal concluding language (a) to remove any doubt as to the effect of the signatures, (b) to remind the person signing that they are representing that they are authorized to sign on behalf of the party indicated, and (c) to ensure that the effective date is clear, especially if it is not the date of last signature.
I also think this gives the moment of signature a bit of formality that signers expect, it reflects a sense of crossing a “finish line” after negotiations, and it reinforces the seriousness of the act.
So, I’ve been using signature language similar to this:
“EACH PERSON signing below affirms that they are authorized to enter into this Agreement on behalf of the Party indicated, and hereby executes this Agreement, which shall be effective on the Effective Date indicated above.”
That’s a hot mess.