In the past, where an agreement requires signing by more than one party, all parties to the agreement may have to be seated together formally to sign the agreement. Alternatively, that one agreement might have to be circulated to all parties for signature one at a time.
Now, execution of agreements can take place even when parties to the agreement are situated in different locations, different countries. This is made possible by allowing documents to be signed in counterparts. What does this mean?
Simply put, it means that duplicate copies of an agreement are printed, so that there is a separate copy for signing by each party to the agreement. The signed copies are then consolidated as though all parties signed on the same page in order to form a complete executed agreement.
After signing, each party to the agreement should get an original signed copy of the agreement for their record. If there are three parties to the agreement, three copies of the agreement must be signed. The complete executed agreement is only released upon mutual agreement where each party gets to keep one original copy of the signed agreement.
Is counterparts clause compulsory?
Generally, an agreement does not need to include a counterparts clause in order for it to be signed in counterparts, as long as the content of each signed version is the same. However, it would be prudent to include such clause to reduce the risk of any party to the agreement questioning the validity of the agreement when it is signed in counterparts.
Sample “counterparts” clauses
Here are some sample clauses which provides for signing in counterparts:
| Used in Agreements |
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This Agreement may be signed in any number of counterparts and by the Parties on separate counterparts, each of which, when so executed, shall be an original, but all counterparts shall together constitute one and the same document. Signatures may be exchanged by e-mail, with original signatures to follow. Each Party agrees to be bound by its own fax or electronic signature and that it accepts the fax or electronic signature of the other Parties. +++ |
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This Agreement may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any party may enter into this Agreement by signing any such counterpart and each counterpart may be signed and executed by the Parties and transmitted by facsimile or electronic transmission and shall be valid and effectual as if executed as an original. +++ |
| This Agreement may be entered into in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any Party may enter into this Agreement by executing any such counterpart. Delivery of an executed signature page of a counterpart by fax or electronic mail shall take effect as delivery of an executed counterpart of this Agreement, and if either method is adopted, without prejudice to the validity of such agreement, each Party shall provide the other with the original of such page as soon as reasonably practicable thereafter. |
| Used in Board Resolutions |
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RESOLVED that these resolutions may be signed in any number of counterparts and by the Directors on separate counterparts, each of which when duly executed and sent by facsimile or electronic transmission to the other Directors and the Company hereto shall be valid and effectual as if executed as an original, but all the counterparts (including counterparts sent by way of facsimile or electronic transmission) shall together constitute one and the same document. +++ |
| RESOLVED that these Resolutions may be signed in any number of counterparts, all of which taken together constitute one and the same document. |
| Used in Constitutions |
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Any resolution in writing signed by all Directors may consist of several documents in like form, each signed by one or more directors. +++ |
| A resolution in writing signed by a majority of Directors shall be as effective as a resolution passed at a meeting of the Directors duly convened and held, and may consist of several documents in the like form each signed by one or more of the Directors. |
When should we not sign in counterparts?
If it is specifically mentioned that signing in counterparts is not allowed, then the document cannot be signed in counterparts. In addition, there are instances where signing in counterparts is not preferred.
For instance, where it requires two authorised signatories to sign on behalf of an entity, it is preferable that both authorised signatories DO NOT sign in counterparts. In the event that it is not possible for both authorised signatories to sign on the same signature page, it is preferable for one authorised signatory to sign in the presence of the company secretary or a witness.
The share transfer form should also preferably not be signed in counterparts e.g. both transferor and transferee must sign on the same share transfer form. However, it is interesting to note that there are instances where the share transfer form is executed in counterparts by including the following clause:
This Share Transfer Form may be executed in any number of counterparts and by the parties to it on separate counterparts, and each of the executed counterparts, when duly exchanged or delivered, shall be deemed to be an original, but taken together, they shall constitute one and the same instrument.
Conclusion
Generally, simple contracts, agreements, deeds and Board resolutions can be executed in counterparts. It would be good to check the document to be signed or your Company’s Constitution to confirm if there are specific circumstances which disallow signing in counterparts. If unsure, always check with your lawyer as to what is required in your circumstances.
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