Effect of backdating a contract
Sometimes certain claims (such as insurance claims) can be backdated if the could not be completed at an earlier date, although there must be good reason for neglecting to claim in advance.
When drafting the agreement, be sure to have candid conversations with the other party about what may have already been disclosed prior to the agreement being signed.Another tricky situation with backdated non-disclosure agreements is the possibility that the Recipient Party of your confidential information failed to inform its representatives or third parties of their confidential duties prior to signing the agreement.In other words, before the agreement with the retroactive date is signed, there’s no contractual obligation for the Recipient Party to maintain confidentiality.For example, if the agreement calls for monthly reports, but the agreement is being signed several months after the effective (retroactive) date, then the agreement will be in breach the moment it’s signed because several months would have passed without any report being issued.Make sure that your language is clear in stating that any such obligations are only applicable after the date of execution, rather than the effective date.
So, many contracts and agreements are considered and negotiated after trade has begun or eager discussions have already taken place – sometimes months past. Thankfully, most jurisdictions allow for contracts, including NDA’s, to be signed with a retroactive date.