When a contract is dated by the date the parties signed instead of adding a date to the introductory clause (which I refer to in this blog post), we see the effective date used to refer to the date on which all parties signed: the duration of that agreement begins on the first day of the Company`s fiscal year that begins in 2004 (effective date) and ends on the last day of the company`s fiscal year. 2007, subject to prior termination in accordance with Section 7 below (the term). I prefer to refer to the date of this agreement. Why add an unnecessarily defined term to the reader? But it is misleading to commit to the effectiveness of the agreement on the date the employee will take office, as the agreement will be effective once the parties have signed it. Instead, it is the company`s obligation to pay the employee and the employee`s obligation to work for that salary that starts later, and I would say that in the contract. If you need a defined term to refer you to that day later, I will use something like the start date. This contract comes into effect from the date (“effective date”) from the date on which this contract is signed by both parties. Finally, you will sometimes see the validity date used in a contract to refer to a date in the past. For example, parties to a distribution agreement signed on March 31, 2007 may wish to have sales included as of January 1, 2007 for the 2007 sales determination.
It would be simpler and clearer to say so much rather than use the term “effective date” and define it as January 1, 2007. But I am doubtful of using the defined term of validity date in a contract to obtain the effectiveness of this contract. Sometimes the parties use the validity date to refer to a future date on which either agreement will occur. For example, a January 2004 employment contract is likely related to the date on which the employee will actually begin work: CET SERVICES GESTION ACCORD (this “agreement”) will be concluded on May 4, 2007 (effective date) of and between Acme Holding Corporation (“Acme”), Astute Advisors LLC (Contractor) and Don R Jones (“Jones”). But as I notice in this blog, I find it easier to organize things so that I can use the date of this agreement in this context. It is customary to indicate in a contract the effectiveness of something or something else – perhaps a merger or a registration statement. There is no dispute about that. First, the validity date is sometimes used to refer to the date indicated in the introductory clause, as in this example – which I did not correct while I changed the names – in the SEC`s EDGAR database.