Here’s what I understand of the practice of having those signing a contract also initial each page of the contract:
- It’s commonplace in wills, apparently as a check against substitution of pages.
- It’s required by statute in the case of some contracts. For example, under Ohio Revised Code 1349.55, each page of a contract providing for a non-recourse civil litigation advance must be initialed by the consumer.
- With respect to business contracts, in the U.S. it would be unusual for the parties to initial each page, except in the case of real-estate contracts.
- In Europe, it’s commonplace for the parties to a business contract to initial each page.
Readers, please tell me more, including with respect to jurisdictions outside the U.S. When do you have the parties initial each page, and why?
In Spain is common practice to initial each page of business contracts, including in an M&A transaction.
My understanding is that the practice of initialing each page is intended to confirm that no pages were added or substituted.
In my experience, some Canadian and Latin American companies also prefer that all signatories initial each page (other than the signature page, which would be redundant). I’ve seen non-U.S. form agreements with printed circles in the margins, into which the signatories can insert their intials.
In U.S. practice, I’ve seen signatories initial pages adjacent to each place where the printed text has been altered in some way. Otherwise, the parties do not typically initial each page.
In The Netherlands it is common to initial all pages: on the signature page, the initialling person (who is not necessarily the signatory of the contract) would place his or her inital next to the party form whom it was initialled. This applies both to M&A and ordinary course business transactions.
In an M&A context, even the binders with schedules and annexes (including those attached to the disclosure ‘letter’) would be initialled. For ‘Agreed Form’ agreements attached as schedules, often, a reference is made that they are initialled for identification purposes (“this is substantially the text we agreed”) and they would probably be replaced after closing when they are executed in their final form. Usually, the lawyers (i.e. the junior associates of the law firm’s partner involved) would do the initialling.
For ordinary course agreements, initialling the pages serves an additional purpose: in several companies, there is a compliance ‘requirement’ that the contract be reviewed (and approved) by in-house legal counsel. The authorised signatory (rather: the two signatories) would sign only if legal counsel has initialled the pages as a sign of approval.
In both contexts, initialling serves the purpose of a final check whether the agreement is complete, properly dated and undone from square bracketed texts. You would typically see that annexes with spec sheets or the general terms and conditions have not been attached yet. That’s where the lawyer comes in.
Willem
We don’t usually do this, but I have been asked to do it, and have no problem with it. As a practical, rather than legal, matter, it does eliminate the uncertainty of whether the copy of the page of the contract I am looking at is the one all parties agreed to. In today’s environment of multi-versions of electronic documents and failure to cooperate with keeping it consistent in one system, it does provide assurance without having to read every word on the page every time to glance at it.
I only initial pages when my gut warns me about trusting the outcome. Most usually, this is because there has already been some confusion about the documentation. Sometimes, it is because I’m worried about the ethical standards of the other side.
That said, with today’s computer capabilities, I have no doubt that someone could fake my initials by copying the image from a page and pasting on to a new page with different text. Since we rarely exchange originals (because images are fast and easy), we can’t rely on the page I signed being depressed where my pen ran over it. Instead, we’re more likely to rely on the transmission record in email. I’m thinking about using someone like EchoSign because they can provide third-party authentication of what got signed.
Chris Lemens
When representing large, multinational companies, I find that most executives have neither the time nor the inclination to review every page of a contract, so that initialing each page would not seem to eliminate the uncertainty. Even worse, sometimes executives will sign the signature block but skip the initial block in the footer of each page, which in my mind creates some uncertainty as to whether the contract is fully executed. It is also common for executives to fail to fill in the date. Ultimately, I would insert an effective date satisfactory to both sides and eliminate the initial block footer. Clients seem much more comfortable with this approach.
The practices in the eastern provinces of Canada are as varied as those described by others who have commented. Governments often follow the procedure described by Willem (Netherlands) probably because the responsible Minister or senior bureaucrat signing on the signature page needs to be assured that the government lawyers have approved the final version by initialling each page. Initialling each page is common here for residential real estate transactions, marital property agreements and wills but unusual in commercial practice.
In commercial practice, it is inconvenient, time-consuming, and no guarantee that the initialler has actually read each page, to call for each page to be initialled. Reputable commercial law firms are generally quite meticulous about documenting changes through to the execution copies.
Regarding Jason’s comment on dates, I generally ask the parties signing not to fill them in – it’s amazing how easy it seems to be to get them wrong, especially when signing by email, possibly over more than one day.
I don’t know if it is required by law or just a matter of custom, but I have had clients of Indian descent, or clients located in India, who have initial each page.
Further, I made an arguament in a litigation brief once that a contracting party entered into an agreement on his own free will and that he was familiar with each provision of the agreemeent based on the fact that he had taken the time to initial each page. I don’t know how persuasive the arguement was, but I did win the motion.
One of my clients requires that all real estate lease documents have a footer that reads “Approved as to Form and Content” on each page (including the signature page) initialled by one of the signing officers. I suspect it is because that signing officer signs the document in Vancouver and then ships the document to Toronto for execution by another signing officer and the initialled footer provides some comfort to the Toronto signing officer that the Vancouver signing officer has checked the document.
Other than that for that client, I try to avoid having pages initialled because it is time-consuming and inconvenient and, in longer documents, it is very easy to miss initialling a page which then raises concerns about proper execution and results in more delay while the missed page is re-circulated for signature.
Echoing a bit what others have shared, the need to ensure (as a Contracts Mgr) that we’re working to the final version of the Ts&Cs, SOW, and any Test Plans or Specs that may be attached to a Contract, is what drives my desire to see every page of all pertinent contract documents initialed especially on complex programs that go through various redlined versions prior to final agreement. When the program team works out of various offices, an initialed document helps to keep everyone in check as to being able to readily recognize approved baseline documents. Nothing is more painful than to encounter a Program Mgr or an engineer in the middle of a design review addressing an unapproved version of what was once our proposed or desired spec that never came to fruition with the customer. Also, forcing a mfg or eng rep to sign off on each page of a SOW or Spec makes them read it and, typically that will ferret out additional requirements not clearly identified in the Contract itself, like furnishing of test models, or supporting on-site integration, etc. So, for a minimal inconvenience, I support initialing as a value added effort.
I confirm that asking each party to initial each page of a business agreement (including the schedules) is extremely common in Europe, for the same reasons stated by Karen Cassimi. I am a French lawyer and have done so for French agreements or agreements between European companies.
Here in South Africa, the practice of initialling each page of a contract merely serves an evidentiary purpose, that is, by assisting in showing that no pages were substituted after signature, initialling shows what it is the parties factually agreed to.
Manuscript changes to and insertions into typed documents are also usually initialled for similar reasons.
The absence of initialled pages, changes and insertions does not, in itself, invalidate a contract.
There are a few statutory exceptions. The most common pertains to wills. Here, the relevant statute requires that the testator and two witnesses sign (note, not initial) the bottom of each page and, in the case of the final page, immediately after the last line of text. Once again though, the failure to do this does not in itself render the will fatally defective, as the statute confers on the court the power to declare a will valid notwithstanding its failure to comply with these formalities.
In Australia, there is no requirement that I’m aware of for initialing each page of a commercial contract, but I come across other parties doing it from time to time. I find it a pain, particularly when presented with a large suite of documents for signing. This raises the question: in situations where there is no clear legal requirement to do so, just because one party decides to initial each page, does that mean the other party should do the same?
In Israel we initial each page, even in very large transactions. It serves an evidentiary purpose. It seems from the comments that apart from the US/UK/Aus most countries prefer this method?
In Mexico it is also customary to initial each page of an agreement and as I lawyer I recommend it to be sure that no page is susbstituted. It is also common for lawyers that review the document to initial and/or sign as a witness. In addition, I like to add a signatures block to the schedules of the agreement because many times the schedules contain important information that is fundamental to the complete agreement.
Regards.
Jorge Mafud
It’s common in the UK to initial every page of a contract, although it’s not a requirement of execution and wouldn’t have any bearing on any queries on whether or not the contract was fully executed if it hadn’t been initialled.
In my firm, it’s used as a compliance tool more than anything to make sure in-house counsel put their initials to something! Obviously it has its uses to make sure no pages are inserted, though as has been rightly pointed out in this day and age it’s pretty easy to fake my initials if someone wanted to.
The worst contract I dealt with was 300+ pages long with an Indian oil company, and they required, as part of their particularly onerous audit processes, to initial every page plus write your full name and sign the back of every page! Needless to say, I delegated that task and gave everyone in the office 20 pages to do and we came up with a generic squiggle of a signature which seemed to work quite nicely!
Best wishes,
Jonathan
Is typing the initials instead of writing something new in real estate contracts?
Deb: That seems whacky. Ken
I’d be most interested to hear from somebody that experienced contract enforcement issues due to the failure to initial every page (which is an ineffective business practice at best).
Another question— If someone initials a page at the bottom that requires a signature on the signature line which they DID NOT sign on- does initialing still count as them signing? I’d think so but am not sure…
Dunno. What’s required is an indication of assent. A court might decide that initialing the bottom of each page relates primarily to avoiding fraud and so doesn’t constitute assent.
In China they sign with a stamp and then they fan out the document and make one (or more if necessary) stamp that crosses every page.