00:13
Adam Stofsky
I have a question about sort of term and dates in contracts. So I've seen contracts that have some kind of effective date or the starting date. So what does that actually mean? And sometimes the date is like, or before the date I signed the contract. Or it says something like dated as of X, Y and Z date. What does that mean?
00:35
David Tollen
Yeah, the effective date is the date the promises in the contract go into effect. So maybe that's the day I start performing my services for you, but maybe the services don't start on that date. But the promise is effective as of that date. The weird thing is that doesn't have to be the date of signature. So I think it's probably fair to say in most contracts, there's, there's no difference between the effective date and signature. And sometimes you'll specifically say the date both parties have signed is the effective date. And, or maybe you don't even say anything about it. And, and it's just clear that the second party signature is the launch date. But in some cases you might say, well, we actually started working together three months ago and we've only now agreed on these provisions that guide our relationship.
01:30
David Tollen
You can set the effective date back in time as of the date you first started performing, so that if it turns out, you know, there was some problem or some issue related to past performance, you've agreed on the rules that will govern it, even though you agreed after the performance happened. You can also set the effective date in the future. You can say this, you know, this doesn't go into effect until a month from now. Something along those lines.
01:57
Adam Stofsky
So I hire someone and they start working because we're in a hurry. And then a month later we have some time and I say, you know, we really ought to have an employment contract. And we dated. The effective date is a month in the past when we started.
02:10
David Tollen
Yeah, that's right. And that's pretty perfectly enforceable. There's no, you know, you're not, it's not some sort of sleight of hand like the, you know, the U.S. constitution says you can't have a retroactive law. Congress can't pass a law that changes what we're supposed to do, you know, retroactively going backwards. But with contracts, both parties are agreeing to it. It's not someone passing a law. So, yeah, it work.
