Option backdating illegal
However, an explanation often given by the person wanting to backdate the document is that the document is merely meant to reflect an oral agreement that has already been made and that this is just a way of documenting it.In theory, this would appear on the face of it to be a reasonable request, as it is just a private arrangement between two parties.And to say it’s up to the bean-counters to catch this situation is silly, because the whole reason you’re using phony dates is so that the bean-counters won’t know what you really did.And this is why defenses to backdating sometimes get hard for me to understand.For example, if one wishes to backdate a document for the purposes of recording an earlier oral agreement, it should nevertheless still be drafted in such a way so as to avoid giving the incorrect impression that it was actually signed on the date stated.The best way to achieve this is to state openly in the document that it is recording an earlier oral agreement made on, and so is with effect from, a particular date and then date it the actual date it was signed.Sure the accounting rules are arcane and most people don’t know them.
Is there an obligation on the lawyer to make at least reasonable endeavour’s to confirm that he is being told the truth?
The position is then clear to all who subsequently look at the document.
Another way is to state at the beginning of the document that it is made “as of” the required date.
I am sure that from time to time we have all come across the vexed question of backdating documents.
A client or, in the case of an in house lawyer colleague (who for the purposes of this article will also be considered a client), asks you to prepare a document and then your heart sinks as he says “oh and it has to be dated” and gives a date which has already passed.