Counterparts: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
No edit summary
No edit summary
 
(54 intermediate revisions by the same user not shown)
Line 1: Line 1:
Outside the arcane and stupefying word of conveyancing, a [[Counterparts and Confirmations - ISDA Provision|counterparts]] clause is, more or less, a total waste of space.
{{boiler|{{financecontractenvy}}{{image|Twins shining|jpg|}}}}{{drop|T|he remainder of the [[contract]]}} might be an absolute shower of confusions, contradictions, misconceptions, failures of [[consideration]], unenforceable half-promises, paralytic [[indemnities]], absurd [[disclaimer]]s of [[liability]] and outrageous derogations from the perfectly sensible allocations of risk vouchsafed by the [[common law]] of [[contract]], but be assured: there ''will'' be a [[counterparts]] clause and it ''will'' be bullet-proof.
===It’s for leases, peeps.===
{{counterparts capsule}}
===Are you, like, ''sure''?===
It is fun<ref>Not for long, but for about five minutes. </ref> counting the client bulletins that say “while a counterparts clause may not be strictly necessary, it ''is'' [[best practice]].” Then you realise they ''all'' say this.  


Black’s Law dictionary has the following to say on Counterparts:
But it ''isn''’t best practice. It is ''stupid'' practice. It is feeble, lawyering by rote. It is not-quite-[[premium mediocre]].
{{box|“In conveyancing. The corresponding part of an instrument; a duplicate or copy. Where an instrument of conveyance, as a lease, is executed in parts, that is, by having several copies or duplicates made and interchangeably executed, that which is executed by the grantor is usually called the "original," and the rest are "counterparts;" although, where all the parties execute every part, this renders them all originals.”}}


There are some situations where it is important that more than one copy of a document is recognised as an “original” - for [[tax]] purposes, for example, or the agreement needs to be formally registered with a land registry or some such thing. But these cases are few and far between non-existent, indeed, when the field you are ploughing overflows with flowering {{isdama}}s — and the rest of the time a [[counterpart]]s clause (like the one in the {{isdama}}) is pure flannel, and {{f|flannel}} which may lead [[Mediocre lawyer|cautious counsel]] to insist on one wherever she can’t see one, on pain of demanding every person gets around the same table and indelibly marks the same parchment with a feather quill.
If you work inhouse and if any of your contract forms have counterparts clauses in them — and let’s face it, they all do, don’t they? then ''you are not thinking hard enough about your job''.


THIS IS NONSENSE.
''Normal'' contracts — even spicy ones, like [[deed]]s<ref>See [http://www.osborneclarke.com/insights/signed-sealed-delivered-execution-of-deeds-and-documents-and-how-it-might-go-wrong/ Osborne Clarke] as authority for this.</ref> — ''do not need a counterparts clause''.  


Outside the formal requirements of execution — deeds of lease, contracts for the conveyance of land, that kind of thing — for an agreement to be enforceable you need to fall back on your first contract law lecture. You need:
How so? Well, think back to your first [[contract]] law lecture: for a contract to be effective you need an [[offer]], [[acceptance]] and [[consideration]].<ref>No, you do '''''not''''' need the [[intention to create legal relations]].</ref> “Execution”, however you manifest it, is simply ''a way of indicating [[acceptance]]''. [[Acceptance]] does not require a quill. ''It does not require a signature at all''. One may accept [[orally]], by a gesture, or even just by behaving in a way that can only really be explained by imputing your acquiescence to the terms of the [[contract]] being argued about. All one needs to do is satisfy oneself — and the court from whom you are praying aid — that your counterparty communicated [[acceptance]] ''somehow''.
*[[offer]]
*[[acceptance]]
*[[consideration]]


Here we are talking about [[acceptance]]. Acceptance does not require the [[aforementioned]] quill, and indeed does not require signature (digital [[or otherwise]]) at all. Acceptance may be evidenced orally, by gesture, or even just by behaving in a way that is only explicable by reference the terms of the putative contract being argued about.
A ''signature'' is simply ''[[evidence]]'' of that [[acceptance]]. Parties signing different copies of the same contract is no less compelling evidence than both signing the same one.


Signature is about evidence of that acceptance, and the fact that parties have signed and exchanged different copies of the same document is just as compelling evidence of their agreement to it than that they signed the same one.
===Why do you care so much, [[JC]]?===
This is a fair question. Does a counterparts clause ''hurt'' anybody? Other than the incremental trees sacrificed to print out that extra four lines of text — and our children’s children, who will expire on a desiccated savannah we once knew as Tottenham Hale as a result — no-one. But it is the ''mediocrity''; the ''lack of gumption'', the unquestioning, ''following-everyone-else-by-rote'' that gets me.  


{{seealso}}
Have some professional pride, fellow [[Legal eagles|eagles]]! Dare to know your stuff! Have no truck with this timid nonsense.
 
===Odd spot===
''The'' Counterparts is a Canadian hardcore punk band from Hamilton, Ontario. True. We think they had trouble getting the guys together in the same room in the early days for rehearsals.
===Second odd spot===
It is well-settled that a single individual cannot grant a lease to himself: {{cite|Rye|Rye|1962|AC|496}}. This is from the “thanks for phoning it in, judges” department. You have to wonder what kind of a confused client brought that kind of case to the judiciary, let alone ''appealed'' the goddamn thing.
 
{{sa}}
*[[In your face]]
*[[Counterparts and Confirmations - ISDA Provision]]
*[[Counterparts and Confirmations - ISDA Provision]]
*{{gmslaprov|Counterparts}} in the {{gmsla}}
*[https://en.wikipedia.org/wiki/Counterparts_(band) Those Great Lakes hell-raisers ''The Counterparts'']
{{ref}}

Latest revision as of 14:07, 14 August 2024

Boilerplate Anatomy™

From our finance contract envy™ series


JC clause suggestion

The JC’s Nutshell summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. You can even ask questions! Ask about it here.

Tell me more
Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

The remainder of the contract might be an absolute shower of confusions, contradictions, misconceptions, failures of consideration, unenforceable half-promises, paralytic indemnities, absurd disclaimers of liability and outrageous derogations from the perfectly sensible allocations of risk vouchsafed by the common law of contract, but be assured: there will be a counterparts clause and it will be bullet-proof.

It’s for leases, peeps.

Black’s Law Dictionary has the following to say on counterparts:

“Where an instrument of conveyance, as a lease, is executed in parts, that is, by having several copies or duplicates made and interchangeably executed, that which is executed by the grantor is usually called the “original,” and the rest are “counterparts;” although, where all the parties execute every part, this renders them all originals.”

Sometimes it is important that more than one copy of a document is recognised as an “original” — for tax purposes, for example, or where “the agreement” must be formally lodged with a land registry. But these cases, involving the conveyance of real estate, are rare — non-existent, indeed, when the field you are ploughing overflows with flowering ISDA Master Agreements, confidentiality agreements and so on. If yours does — and if you are still reading, I can only assume it does, or you are otherwise at some kind of low psychological ebb — a “counterparts” clause is as useful to you as a chocolate tea-pot.

Indeed: even for land lawyers, all it does is sort out which, of a scrum of identical documents signed by different people, is the “original”. This is doubtless important if you are registering leases in land registries, or whatever other grim minutiae land lawyers care about — we banking lawyers have our own grim minutiae to obsess about, so you should forgive us for not giving a tinker’s cuss about yours, die Landadler. [1]

ANYWAY — if your area of legal speciality doesn’t care which of your contracts is the “original” — and seeing as, Q.E.D., they’re identical, why should it? — a counterparts clause is a waste of trees. If the law decrees everyone has to sign the same physical bit of paper (and no legal proposition to our knowledge does, but let’s just say), a clause on that bit of paper saying that they don’t have to, is hardly going to help.

Mark it, nuncle: there is a chicken-and-egg problem here; a temporal paradox — and you know how the JC loves those. For if your contract could only be executed on several pieces of paper if the parties agreed that, then wouldn’t you need them all to sign an agreement, saying just that, on the same piece of paper? And since, to get that agreement, they will have to sign the same piece of paper, why don’t you just have done with it and have them all sign the same copy of the blessèd contract, while you are at it?

But was there ever a logical cul-de-sac so neat, so compelling, that it stopped a legal eagle insisting on stating it anyway, on pain of cratering the trade? There are little eaglets to feed, my friends.

Are you, like, sure?

It is fun[2] counting the client bulletins that say “while a counterparts clause may not be strictly necessary, it is best practice.” Then you realise they all say this.

But it isn’t best practice. It is stupid practice. It is feeble, lawyering by rote. It is not-quite-premium mediocre.

If you work inhouse and if any of your contract forms have counterparts clauses in them — and let’s face it, they all do, don’t they? — then you are not thinking hard enough about your job.

Normal contracts — even spicy ones, like deeds[3]do not need a counterparts clause.

How so? Well, think back to your first contract law lecture: for a contract to be effective you need an offer, acceptance and consideration.[4] “Execution”, however you manifest it, is simply a way of indicating acceptance. Acceptance does not require a quill. It does not require a signature at all. One may accept orally, by a gesture, or even just by behaving in a way that can only really be explained by imputing your acquiescence to the terms of the contract being argued about. All one needs to do is satisfy oneself — and the court from whom you are praying aid — that your counterparty communicated acceptance somehow.

A signature is simply evidence of that acceptance. Parties signing different copies of the same contract is no less compelling evidence than both signing the same one.

Why do you care so much, JC?

This is a fair question. Does a counterparts clause hurt anybody? Other than the incremental trees sacrificed to print out that extra four lines of text — and our children’s children, who will expire on a desiccated savannah we once knew as Tottenham Hale as a result — no-one. But it is the mediocrity; the lack of gumption, the unquestioning, following-everyone-else-by-rote that gets me.

Have some professional pride, fellow eagles! Dare to know your stuff! Have no truck with this timid nonsense.

Odd spot

The Counterparts is a Canadian hardcore punk band from Hamilton, Ontario. True. We think they had trouble getting the guys together in the same room in the early days for rehearsals.

Second odd spot

It is well-settled that a single individual cannot grant a lease to himself: Rye v Rye [1962] AC 496. This is from the “thanks for phoning it in, judges” department. You have to wonder what kind of a confused client brought that kind of case to the judiciary, let alone appealed the goddamn thing.

See also

References

  1. The JC has great friends in the land law game, back home in New Zealand, and he doesn’t want to upset them — not that they are the easily upset types.
  2. Not for long, but for about five minutes.
  3. See Osborne Clarke as authority for this.
  4. No, you do not need the intention to create legal relations.