The backating of a contract should not be done lightly, as it can easily be considered a criminal offence with fairly high consequences. Read 3 min There are no « clear line » tests for legal backdating. However, here are some questions that parties can consider when assessing whether their backating is legal: A contract can be backdated to cover events that occur before the contract is signed. If the answer is not clear after answering these questions, there is what I call the « gastrointestinal law » – does it seem right to you? If the parties feel that they are not doing the right thing or if there are doubts as to whether this is fair, then they should add the disclosure of backdating or reconsider this strategy as a whole. The backsating of a contract may constitute a criminal offence under section 17 (False accounting) or section 19 (False statements by business managers) of the Theft Act 1968. It may also constitute forgery under section 1 of the Counterfeiting and Counterfeiting Act 1981, as the document becomes a « false instrument » if it is « amended on a date … it wasn`t really done. We often receive requests where someone suggests that I should help backdate a transaction, or asks me to write a document to backdate it. Suppose that in the above example of the supplier on December 15, the seller submitted a contract with products delivered from February 1. Suppose the customer signs the contract on January 15, but the seller asks him to send it on January 30.
December backdated so that the seller has a higher turnover for the calendar year and receives a larger bonus. This backdating would be misleading and inappropriate. As with violin labels, the backdating of legal documents can be legal and even advised. It is the responsibility of the parties to a document to ensure that their intentions are honest and that the backdating does not harm third parties or violate legal requirements. When in doubt, significant disclosure of the back-up of the document itself may be helpful in addressing the remaining concerns. There are circumstances in which a predefined document may constitute fraud and/or misrepresentation. It depends on the case-by-case analysis. It is important to note that while the backing of an invoice, bill of exchange or cheque may constitute proof of fraud and/or misrepresentation, it is not in itself sufficient to invalidate the document (see section 16(b) of the Cheques Act 1986 (Cth). Parties should be careful when drafting, dating and signing their contracts, for example: A « status » date is not the only way for parties to disclose that they are anti-dating a document. In a treaty or resolution, recitals[1] can tell the story, including anti-dating. Consider the following example: Many jurisdictions allow contracts that have an expiration date that is earlier than the date the documents were signed. This is commonly referred to as « anti-dating ».
Just because you`re able to backdate a contract in your area doesn`t mean it`s always a good idea to do so. The backing of a contract can have negative effects. Possible disadvantages may be: Although it is not a technical backdating, ratification is often used in the context of the enterprise to allow the approval of a measure. When a company`s board of directors ratifies a contract or other measure previously approved by officers or even by a person who is not otherwise authorized to take action, the effect is similar to backdating. The Company agrees to be bound by a lawsuit prior to the effective approval date. 3. Does either party receive a special advantage or avoid a disadvantage due to backdating? Some treaties make this clearer than others. Many contracts define the « start date » as the « effective date » (not to be confused with the execution date). Others will even have a « from » clause that makes the possibility of backdating even clear by stating: as for the professional advisors who performed the anti-dating, their dishonest behavior not only exposes them to the risk of losing customers, but can also lead to a loss of license and/or criminal penalties. 4.
Solution If the parties have agreed that the document should take effect on a date prior to the date on which they actually sign the document and the facts correspond to that earlier date, this should be communicated to the author of the document, as they may reflect this retroactive agreement in drafting. It is assumed that a document was signed on the date indicated on the document. Are you doing harm by anti-dating the document you are signing? 1. Latest news: It`s against the law When you backdate an act, you give the rest of the world a false impression of when the act was performed and came into effect. While this may seem harmless, in extreme circumstances in New South Wales it could put you in jail for up to 10 years, because contrary to popular belief, dating is not only not recommended, it is fraudulent and illegal. According to the intent, Australian law criminalises someone creating a false document, including a document claiming to have been created on a date when it was not made. 2. They can do more harm than good When it comes to trusts (such as FMSS and family trusts), they only occur when one person (the trustee) holds an asset (trust assets) in trust for someone else (the beneficiary).
Not before. Nevertheless, we sometimes see fiduciary deeds dated July 1, 2015, when the company`s trustee was not established until July 3, 2015. If the trustee did not even exist on July 1, how can the trust exist from that point on? This not only harms the integrity and legal existence of the trust, but also creates obstacles that delay relationships with third parties such as banks and services. There may also be ammunition to a contentious third party who is trying to make a claim against the trust. In New South Wales, the Office of State Revenue has successfully prosecuted individuals (or their agents) who engaged in criminal behaviour to evade their tax obligations by intentionally providing false and misleading information (e.g.B retroactive documents). Backdated documents are also likely to raise red flags at the ATO as a sign of possible fraud. 3. Think about the consequences If you are asked to backdate documents, be aware that you may break the law to compensate for someone else`s lack of planning. More relevant in the context of SMSF is that those convicted of a crime of dishonest conduct are disqualified persons, which prevents them from being trustees (or members) of an SMSF or, if they are already acting as such, forced to resign immediately and leave the SMSF.
Disqualification will be a public matter, as any third party looking for the name of a person who has been disqualified may come across the ATO`s announcement in the Official Journal of Government that that person is not an « appropriate person » to administer an SMSF. Not a good look! Perhaps the most common form of anti-dating is « ab » data. Often, at the beginning of a contract, it is stated that it was concluded « from » a certain date. The use of the term « stand » should be a wake-up call that the date is not necessarily the date on which the contract was signed. Rather, it is a date on which the parties have agreed that their contract will take effect. The « stand date » may be before or after the actual date of signature. So, is it ever acceptable to backdate a document? There are rare cases where it may be permitted or even justified to do so. A commonly used example is when the parties initially signed a document, but the original had been lost or destroyed before it could be stamped or submitted. In such cases, it would be quite right for the parties to reissue an identical document to replace the missing document. Somewhat weaker, it could be justified if the parties concluded a binding agreement at a certain point in time, but did not write it before a later date, be entitled to indicate the date of the agreement instead of the date of execution, if the conditions were indeed identical (a more likely scenario would be given the length and detail of many modern written contracts, if the terms of the contract are agreed by e-mail at a given time. , but the parties were only available at a later date to sign the actual physical documents). However, in any case, this could only be the case if the contact is a « simple » contract and not formally performed as an act (i.e.
signed, sealed and delivered). For enforcement as an act, the signature requirement is a crucial part of the process of creating rights by an act, and therefore it is never permissible to backdate an act. .
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