A brief guide to contract dates
Contract dates seems simple
It seems simple, but which date to write on a contract, and how to interpret the dates often raises some fiddly. There are a number of dates which can appear within contracts. These generally include:
- a contract date;
- a signature date; and
- defined dates.
The ‘contract date’ is the date often written on the cover or last page of the contract. The ‘signature date’ is, unsurprisingly, the date written next to or below the signature of each party, showing the date they signed the contract. Contracts can also, confusingly, contain defined dates such as ‘commencement date’, ‘effective date’ or ‘start date’. These dates indicate when the contract or parts of it are due to have legal effect, if these dates are different to the contract and/or signature dates.
The contract date is usually written onto the front cover and the first page of the contract (although there is no legal requirement to do so). Generally this is the date that the last party signed the contract. This date is usually the date which both parties consider to be the date the contract was made and became effective, unless there is a different defined ‘Effective Date’ or ‘Commencement Date’. If there is a date at the beginning of the contract which is not the date of the last signature this can lead to confusion or be of no effect in interpreting when the contract actually began. However, the date written on the front of the contract cannot necessarily be relied upon as being the date the contract came into force. This will depend upon the parties’ intention and when the other elements of a contract formation were satisfied (these being offer, acceptance, consideration, intention to create legal relations, and certainty of terms).
The date next to a signature should always be the date that party signed the document.
Often a contract will be entered into and dated (as explained above) on the date of the last signature, but will contain a different and defined ‘effective date’ specifying when some or all of the obligations of the parties are to begin. This date can be in the future or the past – whether a contract can create or confirm rights relating to events in the past is a matter of interpretation.
Parties may be in negotiations for months before the date of the contract and then refer to the date they started negotiations as being the effective date. In that case, the parties will, from the date of the contract, be able to enforce backdated rights which started on the defined effective date.
There are a few interesting legal points which arise from the ability to have a backdated effective date.
- The contract can also require the parties to behave as if the contract had been in force since the earlier effective date. Case law confirms that an indemnity can be created at an earlier date than the date of the contract.
- Non-parties are not bound by anything in the contract but may be able to enforce third party rights in relation to the pre-contractual period.
- The contract may replace any other rights which had arisen between the parties in the negotiation period. These rights can include liability in tort (which can be quite different to contractual rights) and rights based upon any verbal agreement reached between the parties.
It is important to remember that back-dating the defined effective date is not the same as back-dating the contract itself. Back-dating a contract can be a criminal offence and will be a breach of professional conduct rules for solicitors.