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THE STRUCTURE OF A COMMERCIAL CONTRACT (2) - THE COMMENCEMENT AND DATE (B1+/B2

In the first part of this series, we looked at the heading.


“INTERNATIONAL DISTRIBUTION AGREEMENT [The Heading]


THIS AGREEMENT IS ENTERED INTO ON THIS 18th DAY OF FEBRUARY 2021


BETWEEN


HAPPY SKIN Inc (hereinafter referred to as “HSI”), a Company registered in the State of California, having its office at 9876 Slick Boulevard, San Jose, California


AND


THE DISTRIBUTOR CAMDIS Limited, (hereinafter referred to as “CAMDIS”) whose registered office is at 12 Mountain Road, Cambridge, England, and whose registered number is 49820912. “


After the heading, we can see the wording ‘THIS AGREEMENT IS ENTERED INTO ON THIS 18th DAY OF FEBRUARY 2021. This section of the contract is called the Commencement and Date. However, you will hear it called other things, including:


· ‘the contract date’

· the ‘effective date’ (particularly in the United States)

· ‘the start date’


This is the date that the parties to the contract agree to be bound by the contract terms. It is the date the contract is entered into – in other words, the date when the contract becomes legally effective, commences, or comes into effect - unless the contract provides otherwise. To enter into something (such as a contract) means to become involved in it.


This may all seem very simple. However, often it is not. A commercial contract may contain many dates. For example, the contract will also be signed and there should be a signature date, which is the date the party signed the document. As a rule of thumb [1], the Commencement Date will be the date when the last party signed the contract.


The date in the example extract is expressed ‘on this 18th day of February 2021’. This is quite a formal way of writing a date. If you wish to write a date in a legal document, such as a commercial contract, it is usually best to express the day in figures, (1, 2, 3 etc), the month in words (January, February, etc) and the year in figures, with four digits (2021, 2022, etc), and without punctuation. For example


‘18 February 2021’.


As we have said, a commercial contract will probably contain many dates, including dates when particular obligations are due to be performed or fulfilled.


Can a contract be ‘backdated’? That is, can a contract be dated to cover events which have occurred before the date the contract was signed?


Backdating a legal document, such as a commercial contract, is very dangerous and is also, potentially, a criminal offence under section 17 and section 19 of the Theft Act 1968. Usually, careful drafting of the contract can avoid any need to backdate it. There are only very limited situations when a contract should be backdated.


[1] A ‘rule of thumb’ just means a very general rule about something.


© Cambridge Legal English Academy 2021



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