In another example, imagine an owner who does not wish to rent an apartment to a minority candidate. The landlord finds a tenant without a minority and dates the signing of that tenant to assert that the non-minority tenant rented the apartment before the minority applicant`s application. This retrodedation may be illegal, as it should mislead the minority applicant and facilitate unlawful discrimination against the lessor. Sometimes a document has to be backdated to make it correct. Suppose a creditor starts delivering his product under a proposed contract to determine later that the customer never signed the contract. In this case, the insertion of the date on which the parties started the performance under the contract is more precise than the date of signature to be inserted. Based on the example of a credit of $1 million from above, the returned note could have been fraudulent under various facts. Suppose the client deliberately planned not to sign the debt note because he had informed his joint venture partner that the funds were a capital contribution that should not be repaid. In this case, while it is appropriate to document the loan with a debt, the underlying project could have been part of a plan to mislead a third party.
In other cases, the parties may enter into a transaction orally “in hand” with the intention of concluding a written agreement at a later date. Many years ago, one of my clients had to borrow $1 million. To my surprise, a benevolent lender wired the money to the customer without having credit papers on site, but with the hope of obtaining a debt note at a later date. The $1 million sola change that I am preparing for this client to deliver to his benefactor, the actual date the funds were wired, was legal. It was created to document or commemorate an earlier oral agreement on the repayment of funds. The reversal of contract documents can be one of the most complex issues facing lawyers. While this problem only appears from time to time when it does, it is important to have a good understanding of what to do. In the case of a private contract, a retrodaation is not normally illegal. Legality issues come into play when the parties to a contract or their lawyer use backdated documents. If, in the credit example above, the seller has submitted a contract on December 15 in which the products will be delivered from February 1.
Suppose the Debitor signs the contract on January 15, but the seller asks Debitor to send it back to December 30, so that the seller achieves higher sales for the calendar year and receives a greater bonus. This retrodedation would be intended to be misled and would not be appropriate. In this case, the parties are often tempted to agree to the service contract on March 1 to ensure that the service contract creates and validates rights related to services that have taken place from that date. However, the parties often do not recognize that this effect can be achieved by inserting a “date of effect” or “initial clause” in the service contract, which states that the service contract is dated April 1, but that its provisions apply from March 1. This date, considered to be earlier, should also be recognized in the term clause of the agreement, in order to ensure its coherence and to clearly under-demonstrate the intention of the parties.