Separate counterparts: Overview, definition, and example
What are separate counterparts?
Separate counterparts refer to a provision in an agreement that allows the contract to be signed in multiple copies, with each copy (or counterpart) considered legally valid and effective. Each party can sign a separate counterpart of the agreement, and all signed counterparts together form a single, binding contract. This provision is commonly included to allow parties in different locations to sign and execute the contract without needing to be physically present at the same time.
For example, in a business transaction between companies in different cities, each company can sign its respective counterpart of the agreement and send it to the other party. Once all counterparts are signed, the agreement becomes enforceable.
Why are separate counterparts important?
Separate counterparts are important because they facilitate the execution of contracts, especially in situations where parties are geographically distant or unable to meet in person. They provide flexibility and convenience while ensuring that each party's signature is legally valid, thus simplifying the process of finalizing the contract.
For businesses, this provision speeds up the execution of agreements and allows for remote signings. For individuals, it ensures they are able to participate in and execute contracts without logistical barriers, such as travel or time constraints.
Understanding separate counterparts through an example
Imagine two companies in different countries entering into a distribution agreement. Due to the distance, each company signs a separate counterpart of the agreement. One company signs in New York, while the other signs in London. After both companies sign their respective counterparts, the contract is considered fully executed and legally binding.
In another example, a board of directors in a large corporation agrees to a shareholder agreement. Due to the board members being spread across multiple locations, each director signs a separate counterpart of the agreement. After all signatures are gathered, the agreement is considered finalized and enforceable.
An example of a separate counterparts clause
Here’s how a separate counterparts clause might appear in an agreement:
“This Agreement may be executed in separate counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Each Party may execute a counterpart of this Agreement, and delivery of a signed counterpart by electronic transmission shall have the same effect as delivery of an original.”
Conclusion
Separate counterparts allow parties to execute contracts more efficiently and flexibly, especially when geographical distance or scheduling conflicts would otherwise prevent in-person signing. This provision ensures that the contract is legally binding regardless of where or when the parties sign. For businesses and individuals, it simplifies the contract execution process and reduces delays, ensuring timely agreements. Including a clear separate counterparts clause ensures that the contract is legally valid and enforceable, even if signed in parts.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.