The contracts you sign with the parties you work with, be it an employee, business partner, supplier or contractor, will include dates. These dates are crucial, as they impact the enforceability of your agreements.
Below are four examples of such dates:
1. Execution date
This is the day you and the other signatory sign the agreement. The contract is not necessarily enforceable by law on this date.
2. Effective date
This is when the terms of the contract legally come into effect. If you and the other party sign the agreement before this date, it will not be enforceable until the included effective date.
Different factors can contribute to the execution date being before the effective one. For instance, a supplier may sign an agreement but needs to arrange logistics before they can start observing their obligations, an employee may accept a job offer and sign the contract before the start date or a contractor may sign a contract for a repair project, but they need to receive a permit before they can commence working.
3. Payment date
Your employment contract can have a fixed pay date, for example, every 23rd of the month, or alternate pay dates, such as every Friday. The contract you sign with a supplier will typically have a payment date that depends on when they invoice you. For example, net 30, which means the payment is due 30 days after the invoice date. With large projects, such as a renovation, you can pay a contractor after the project is completed.
4. Review date
The review date is when the terms and conditions of a business agreement should be reviewed to ensure it remains relevant.
These are a few dates to include in your business contracts. You need to pay close attention to them and any other date you state and stay on top of your obligations to avoid breaching your agreements.