With Retrospective Effect? Tread Cautiously

Effective date of a contract is a crucial indicator to decide the validity and tenure of any timeline interconnected with the effective date and also it will mark the legal commencement of a contract and binding of contract on the parties to that contract. Generally last signed date of the contract is considered as effective date, unless a specific date is defined as effective date.

Such specific date may be the last signature date or a date (other than the last signed date). As long as the effective date and last signature date are same, usually there is no issue. Same is the case when the effective date comes after the execution date – it means although executed, the contract is not in force and the contractual rights and obligations of the parties have not yet triggered.