Counterparts

Boilerplate Anatomy™ →Go uptown You sign first. No, you. A “typical” Counterparts clause: This agreement (and any and all amendments, variations, modifications and/or waivers (wholly or in part) in respect of it) may be executed and delivered in counterparts (including by facsimile transmission and by electronic messaging system), each of which shall be deemed to be deemed an original. view template Resources: commercial imperative | Verbiage | Look, I tried | The ultimate client Index: Click ᐅ to expand: Boilerplate Representations and warranties 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 liabilty and outrageous derogations from the perfectly sensible allocations of risk vouchsafed by the common law of contract, but be assured the there will be a counterparts clause and it will be bullet-proof.

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.

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.

Cautious counsel may nonetheless insist on one, against the threat of having everyone get around the same table to mark the same parchment with a feather quill.

Unless you are executing a deed of lease, THIS IS NONSENSE. Normal contracts — even vaguely spicy ones, like deeds — do not require a counterparts clause. How so? Well, think back to your first contract law lecture:

For a contract to be effective you need:

• offer
• acceptance
• consideration

Execution, however you manifest it, is simply a way of indicating acceptance. Acceptance does not require a quill. It does not require a signature (digital or otherwise) at all. One may accept orally, by 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.

Note, also, that where formal execution requirements do require every hand to besmirch the same physical parchment, a counterparts clause won’t save you. This is deep magic, and no beginner’s spell will shoo it away.

A handy flow-chart

You can map the logical utility of a counterparts clause like this:

Is the contract a deed of lease?

No: You don’t need a counterparts clause. You can safely sign in as many counterparts as you like without one.

Yes: A counterparts clause won’t work. You all have to sign the same document.

Ergo: situations in which a counterparts clause has any utility at all: 0.

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.

Here all week, folks!

This gag comes to you direct from our “here all week, folks!” store of corking one-liners.

See also

• In your face
• Counterparts and Confirmations - ISDA Provision
• Counterparts in the 2010 GMSLA
• Those Great Lakes hell-raisers The Counterparts