How well does the lawyer know the client? It is important to stay current with legal developments, and the articles are a great aid toward this goal. For obvious reasons, any request to backdate a document for these reasons should be flatly turned down. Options backdating are we approaching the end? Does he need to check to see whether that was actually the case or can he take an ostrich-like position and put his head in the sand and not ask any questions?
If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us. Only proceed if the answer is no. One of the thornier issues which comes up in legal practice from time to time is the back dating of documents. For example, if a seller had sold his house in December then the seller could have taken advantage of certain tax benefits.
Rather, it is the use of the backdated documents by the parties or their counsel that may violate the law. The position is then clear to all who subsequently look at the document. An oral contract can leave substantial room for debate as to its terms. These are questions he will probably be asked by the judge or regulator if things go wrong and to which he will need convincing answers. Probably the most difficult of the grey areas occurs where parties have a recurring commercial relationship which starts informally, but they later decide to document it and agree terms.
Back dating contracts and other documents
However, such doctrines are normally limited to situations where one party backdates the contract without the knowledge or consent of the other. Deeds can also be advantageous even when they are not strictly required by law. In theory, this would appear on the face of it to be a reasonable request, as it is just a private arrangement between two parties.
Backdating contracts and other documents and instruments
- What confirmation of the earlier agreement did the client or the company for which the client and lawyer works provide?
- In my experience, law firms and especially magic circle law firms very seldom engage in such practice with regards to dating of documents.
- Furthermore, physically posting the contract between the parties may be prohibitively slow.
- Where backdating is done for financial gain, it may also constitute the more dull-sounding criminal offence of obtaining a pecuniary advantage by deception.
However in practice, for both good reasons and bad, back dating of documents does occur. Where back dating is done for financial gain, it may also constitute the more dull-sounding criminal offence of obtaining a pecuniary advantage by deception. He also has no way of knowing whether the backdating will be scrutinized by a regulatory authority or even a Court. Documents are most commonly executed as simple contracts. However in practice, for both good reasons and bad, backdating of documents does occur.
Share Facebook Twitter Linked In. Importantly, they should realise that this will not necessarily change the factual circumstances at the earlier date. In certain cases a criminal act may negate insurance. In the law of contracts, it is elementary that ordinarily a contract speaks from the day of its date, regardless of when it was executed and delivered. Litigation, Insolvency and Restructuring.
Is backdating legal - Lexology
The ability to access the articles without cost is critical and I hope Lexology continues with the good work. The argument is obviously not valid if the transaction is one which is required by law to be in writing such as a transfer of land. Typically contracts will be made in writing, on the basis that this provides a written record of the terms of the contract agreed between the parties. But even if a person is not charged with a crime, the fact that a crime can be demonstrated to have occurred may still impact the rights of the parties.
In practice the courts are more sympathetic than one might anticipate. As a practical matter, the proper date to put on an agreement is something that corporate counsel is likely to have to make a judgment call on quite often. This is not an agreement that could have been made orally.
- However, back dating documents undoubtedly creates both risk and confusion.
- Any later and the claim will be time-barred.
- The first and most important thing to note about the consequences of back dating a document is that it is potentially a criminal offence.
Benjamin Alarie Blue J Legal. This is a fraud on the tax authorities, a criminal offence and is likely to get the lawyer who prepared the document disciplined by his regulator and possibly also charged as a co-conspirator. This is because documents take time to draft, negotiate and execute. The first and most important thing to note about the consequences of backdating a document is that it is potentially a criminal offence. For example, transfers of real estate and powers of attorney must be made by deed.
Related international articles Is Backdating Ever Okay? One of the thornier issues which comes up in legal practice from time to time is the backdating of documents. Ascertain if the backdating would violate a law or adversely affect the rights of third parties including government and regulatory bodies. However, marriage not dating kiss such doctrines are normally limited to situations where one party back dates the contract without the knowledge or consent of the other. Email required Address never made public.
The execution of documents getting it right
Is it legal to comply with the request or must it always be refused outright? There are some ways in which the lawyer can give himself some protection in agreeing to such a request but they are not foolproof. Alternatively, is there a way of legally trying to achieve the required objective?
However, there has been some controversial English case law suggesting that, in some circumstances, contracts and deeds executed virtually may not be enforceable. 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. Such relation back or forward contravenes no principle of law and is determined by the intent of the parties as deduced from the instrument itself. Category All People Expertise Insights.
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The event did not happen during the time period required for the benefit so an attempt is being made to pretend that it did. Is the client a longstanding one who has always acted properly in the past? Contracts can be made orally or in writing.
Notify me of new posts via email. However, he only realizes this in January and so wishes to backdate the document to December. By continuing to use this website, questions to ask you agree to their use. Most counsel would agree that parties are free to reach agreement on when they would like to their contracts to be effective from.
Related pages Entering into commercial agreements. Entering into commercial agreements. You can never be absolutely sure whether it is alive or dead or perhaps alive from a different date than you had anticipated until a judge opens the box for you. In such cases it would be perfectly proper for the parties to re-execute an identical document to replace the missing one. There are rare occasions when it may be permissible or even justified to do so.
Simple contracts and deeds typically contain a clause expressly allowing the document to be executed in counterparts. Lack of a prosecution does not mean a lack of legal consequences. Simple contracts and deeds are often executed in counterparts. Deeds are required by law in certain circumstances. However, where lay persons write contracts themselves or download a pro forma from the internet, ignore list often these legal niceties are lost upon them.