Backdating contracts verbal contracts
In the commercial world there is often a desire for documents to take effect before the date on which they are ultimately signed.
Typically this is where parties have reached an agreement and must wait while their solicitors properly document that agreement.
Courts have certainly been willing to hold that a contract exists before a written contract has been finalized. But I’d still use as the date for a written contract the date it was signed.
It’s likely that the written contract addresses many more issues than were covered by the oral agreement, making the written contract different from the oral agreement.
The legal necessity for documentation applies only to certain types of transactions.
The types of transactions that must be in writing are based on legislation that traces back to the Statute of Frauds (1677) UK.
For example, although the sale of a business could be conducted entirely without writing, the parties will be required to submit a notice (in South Australia called a ‘71E Statement’) to their State Revenue authority about the sale and pay Stamp Duty on the sale as if a document had been drawn.
An oral sale of a business may also necessitate registration of the change of ownership of the business name, bank finance documentation and re-registration of any motor vehicles sold – to name but a few examples.
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My question, is it legal to backdate an NDA like that?
Is it a civil contract whose parties are allowed to agree (even retroactively) than an NDA is in place?
Texas does not have any specific laws that prohibit it and in contracts law, this concept is called the "relation back" theory of contract effectiveness. 1990) for an explanation that back dating violates no general contract law principles and is "determined by the intent of the parties as deduced from the instrument itself." Aside from the obvious issues where someone is back-dating a contract to commit some type of fraud, back-dating raises a whole host of unforeseen consequences with regards to a party's performance under the contract as well as the rights of third parties.
The best practice is to make it clear that the effective date and the execution date are different. Things are usually implied though a course of business.