Last week I gave my “Drafting Clearer Contracts” seminar in Santa Clara. During a break, one of the participants asked me if I thought it matters in what order the parties sign a contract.
More specifically, she’s concerned about sending out a contract drafted and signed by her company and getting back a fully signed copy with changes added by the other party. That’s why her company’s standard terms include a provision stating that any unilateral changes will constitute a proposed amendment to the contract and won’t affect the validity of the contract or the other side’s acceptance of the contract.
Signing first shouldn’t pose a risk—if the other side makes unilateral changes, you don’t have a contract. But problems could arise if you don’t bother looking through what the other party sends back, as that could result in the other party’s thinking that you’ve accepted their changes. Being the last to sign might make it more likely that you’d look at what the other side sends you, but not if you sign separate signature pages.
So checking what the other side sends you is more important than the order in which the parties sign.
And I’m not crazy about provisions stating that if you make unilateral changes, they’ll be ignored and the parties will still have a contract—the parties won’t have had a meeting of the minds. Such provisions attempt to make the best of a bad job, but it would be much better to avoid the issue in the first place.