Last week an exchange of emails with Alex Hamilton prompted me to rethink an aspect of the date you put in the introductory clause of a contract. That led to my doing this blog post over the weekend, which in turn led to this comment on LinkedIn that caused me to do further rethinking, which led to my badgering @writeclimbrun. Hence this blog post. It supersedes the weekend blog post, which I’ll leave up for a couple more days, then delete.
The LinkedIn comment made me realize—d’oh!—that after a contract is signed you can insert in the introductory clause the date the last party signed, and that e-signature software makes it easy to do that.
Progress comes in fits and starts, and it can be messy. I love it! Anyway, here goes. If you spot ways I can improve this account, please let me know.
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The date of a contract is established one of two ways—by stating the date in the introductory clause or by having the parties date their signatures. (That’s different from stating in the introductory clause a date that reflects the timing of performance; that’s a topic for another post.)
If the parties all sign on the same day (or close to it), it can simplify signing formalities if you put a date in the introductory clause and don’t provide for signatures to be dated. It simplifies the task for those signing and spares you having to chase after people who forgot to date their signature.
And not dating signatures allows those handling a transaction to discreetly ignore that one or more parties signed on a date other than the date in the introductory clause. For example, if the closing date for a transaction slips by a day or two from the scheduled date, the parties might agree it’s not worth changing the date in each of the deal documents, or that it wouldn’t be feasible to do so. And a party to a contract might find it more convenient to sign it a day or two before the date in the introductory clause or might not get around to signing it until a day or two after the date in the introductory clause.
If the parties sign on different days and no one is inclined to ignore that and rely on a date in the introductory clause, you determine the date of the contract by having the parties date their signatures—as a matter of contract law, the date the last party signs is the date of the contract. That’s usually how ordinary-course commercial contracts are dated.
Even if you have parties date their signatures, for ease of reference it would be useful to state the date of the contract in the introductory clause, to spare readers of the contract from having to consult the signatures to determine the date of the contract. Manually adding the date of the contract to the introductory clause after the contract has been signed adds an extra step—someone would have to consult the signatures to determine the date the last party signed and then revise the first page to replace with the actual date a placeholder date (as in [insert here the date the last party signs]) or a blank. Using a placeholder date is preferable, as it would inform the parties of the intended change; by signing the contract, the parties would indicate their assent to that change.
If a company does a lot of contracts, adding the date of the contract manually after the contract has been signed could be an administrative burden. But e-signature software takes care of that by giving users the option of adding to the introductory clause the date that the last party signs. The e-signature process should inform tell those signing what will happen.
If you’re unwilling to handle manually or through e-signature software the task of adding the date of the contract to the introductory clause, you have four options:
First, you could let readers figure the date out for themselves by consulting the signature blocks. But that would be a nuisance, and some readers might get the date wrong.
Second, you could put the signature blocks on the first page of the contract. That would make them more accessible, but it would still be up to readers to figure out the date.
Third, after the contract has been signed, you could add the date of the contract to the entry for that contract in your contracts database. But some readers might look to the contract itself for that information.
And fourth, as a matter of convenience you could put a reference date in the introductory clause of the copy to be signed. Because you wouldn’t yet know when the last party signs, presumably it would be a coincidence if the date you choose happens to match the actual date of the contract. To signal what you’re doing, you could preface the added date with dated for reference or dated for reference purposes only. It might be simplest to use as the reference date the date the first party signs—presumably the party drafting the contract could make sure it signs the contract on that date.
Using a reference date would spare you having to revise the contract to insert the date the last party signed, but at the cost of lumbering the contract with a date that might or might not be the actual date of the contract. It follows that it might well be inaccurate to use the phrase the date of this agreement to indicate when, say, the term of the contract starts or when the parties are making statements of fact. For those purposes, what matters is the actual date of the contract, so you’d have to say instead something like the date the parties entered into this agreement. The only purpose of the reference date would be to give you a date to use when referring to the contract.
None of those four options seems helpful. If you determine the date of the contract by having the parties date their signatures, the better option is to either manually or through e-signature software add that date to the introductory clause after the contract has been signed.
Or for wet-ink signatures, put the signature blocks immediately after the preamble, such as this hypothetical example (from my course materials; note that it specifically states that terms after the signatures are part of the contract):
https://uploads.disquscdn.com/images/6642838d255b3668fa6624a4babe180f74f302ec5338fe8a6fcc203adb9f02c4.png
I can always be wrong, but I but I put the pieces together differently. Here’s my take:
1/ When does a contract take effect? Answer: at the point when the last party to sign signs. That point occurs during a 24-hour period, ie, a day or date.
2/ The ‘contract date’ is simply the date *during which* the contract took effect.
3/ If the date in the introductory clause, the date in the concluding clause, or the date by a signer’s signature is not the actual date during which the contract took effect, then the text of the contract does not accurately state when the contract took effect.
4/ Put otherwise, words in the contract cannot make the contract take effect at a point different from the point when the last party to sign signs. Words can ‘discreetly’ misstate that point, but not change it.
5/ If it ever becomes necessary to prove when the contract took effect, the usual means of proof apply (testimony, documents, non-documentary tangible evidence, presumptions, matters of judicial notice, and admissions of parties).
6/ If one or more parties did things in anticipation of the future signing of the contract, and the parties want the eventually signed contract to make provision for those things, they can do that. But nothing of that sort changes the point at which the contract takes effect. –Wright
Thank you for the excellent analysis.
I have to admit, I have had sleepless nights over this “problem” because our contracts are typically executed in counterparts at different times and places.
I prefer a combining together two of your options. That way there can be no confusion or misunderstanding.
” This Sale and Purchase Agreement, including all Appendixes hereto, (hereinafter, the “Agreement”) is entered into by and between the following Parties on the date that the last Party affixed his signature hereto. The Agreement is dated for reference ______.”
Hi Robert. I don’t wish to seem like a jerk, but I could use your preferred wording as an example of how NOT to do it!