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Where backdating is done for financial gain, it may also constitute the more dull-sounding criminal offence of obtaining a pecuniary advantage by deception.Although criminal prosecution might be a risk in serious fraud cases, in most day to day legal matters where backdating occurs for reasons of administrative convenience, or simply by oversight or error, the risk of being charged with a crime are commensurately small.In certain cases a criminal act may negate insurance.At the very least a party seeking equitable relief will struggle to meet the test of “clean hands” which the courts require.My father (who was also a lawyer) used to love telling a story about how he was able to triumphantly prove to the court that a yacht charter was backdated by showing the stamps which had been used to pay the nominal 15¢ stamp duty were in fact first issued by the post office some four months after the date stated on the face of the document.However, he rarely adds that he actually ended up losing that trial, which brings us to my second point – even though the law generally deprecates the backdating of documents, the legal consequences of backdating are highly variable.However in practice, for both good reasons and bad, backdating of documents does occur.The risks of backdating (or misdating) documents accidentally is multiplied in modern commercial transactions by the practice of getting all the documents signed before “completion” and then rushing around dating them afterwards.
It has been a federal crime in the United States since 1872. § 1343 provides: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.
Although in exceptional cases – where third party rights are not affected – the courts might be persuaded to treat the stated date as being the effective date, a situation we return to below. There are rare occasions when it may be permissible or even justified to do so.
A commonly used example is where the parties had originally signed a document, but the original had been lost or destroyed before it could be stamped or filed.
Legally speaking of course what they should do is put a provision in the contract which states that the terms of this contract shall also govern prior transactions which the parties shall henceforth treat as being regulated by those terms.
However, where lay persons write contracts themselves or download a from the internet, often these legal niceties are lost upon them.