Effect of backdating a contract


Although in exceptional cases – where third party rights are not affected – the courts might be persuaded to treat the stated date as being the effective date, a situation we return to below. There are rare occasions when it may be permissible or even justified to do so.In common law systems Bills of Exchange Acts will normally expressly permit cheques, promissory notes and other bills of exchange to be post-dated or ante-dated.However in practice, for both good reasons and bad, back dating of documents does occur.



Although criminal prosecution might be a risk in serious fraud cases, in most day to day legal matters where back dating occurs for reasons of administrative convenience, or simply by oversight or error, the risk of being charged with a crime are commensurately small.And if a share certificate or bond certificate is lost, it will invariably be reissued as signed and sealed with its original date of issue - not the date of reissue.Another commonly cited example is where the parties had originally signed a document, but the original had been lost or destroyed before it could be stamped or filed.The courts will generally try to construe contracts to give effect to the parties’ commercial intentions, not destroy them (see for example the decision of the Canadian Supreme Court in [1981] 2 SCR 6).



Effect of backdating a contract comments


  • Is backdating okay? – ContractsGuru profil de paulette60

    paulette60

    If you are thinking of rekindling your relationship with an old flame, you came to the wrong place. What “backdating” is about is signing an agreement today with the intent that it be effective as of a prior date. Let's suppose you hire a web designer to build a new website. Perhaps, you don't know exactly what kind of website.…