Counterparts

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Outside the arcane and stupefying word of conveyancing, a counterparts clause is a waste of trees. Indeed: even there, it is a waste of trees, because it won’t work. Let that not stop your legal eagles insisting on one, on pain of cratering the trade altogether, of course: a fellow has to put food on the table for his younglings.

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. Away from the gripping world of land law, a counterparts clause is as useful as a chocolate tea-pot.

Cautious counsel (equally useful, of course) 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
• Those Great Lakes hell-raisers The Counterparts