Contract Drafting Series Seven: Counterparts.
What is a "Counterpart"?
If you look at your contract you’re most likely to see a “counterparts” provision at or near the end of it that reads something like this:
“This Agreement may be executed in any number of identical counterparts and each counterpart shall be deemed to be an original instrument, but all counterparts taken together shall constitute a single instrument.”
Although I personally would change some of the language in this particular provision, we can still use it as a sample to understand what “counterparts” are.
In most cases, a contract is going to represent a transaction between two parties. Especially today, those parties are usually not physically together looking over, drafting, and negotiating a contract. Usually, the parties may speak on the phone, go back and forth over email, text, or whatever the case may be until a version that both parties are satisfied with becomes a final version. Each party will receive their own copy of the contract to review and sign at their leisure: at home, at the park … or their corporate office. Each of these copies is called a counterpart.
One party will sign their copy and the other party will sign a separate copy, leaving two different copies of the same contract signed by each party, respectively. In this scenario, there is no one document that has been signed by both parties. Technically, the contract would be incomplete. However, the counterparts clause comes in for the save like a relief pitcher in the ninth inning.
Due to the counterparts clause, each copy is treated as an original and both copies, combined, are treated as one instrument (document), comprising one contract.
The counterparts provision came in handy before Docusign, Adobe E-Sign, and other electronic signature platforms became commonly used because copies of contracts were routinely printed and left all over the place. A few years ago, e-sign platforms didn’t exist or were used only rarely. With today’s technology, a counterparts clause may not be necessary in your contract because the same document has the ability to be e-signed by both parties. Docusign, Adobe and other platforms do a great job of creating an “envelope” and assigning one envelope ID which will cause the contract to be viewed as one copy since the version with both signatures has the same envelope ID. You should still include a counterparts clause in the event you sign electronically but the other party prints, signs and emails/mails you their copy.
Shaunt Oozoonian, Esq.
Oozoonian Law Corporation
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