Define backdating

The appellate court affirmed the trial court and stated: The law does not support the blanket conclusion that a retroactive effective date in a contract is only enforceable when the evidence demonstrates that the parties had agreed to the material terms of their contract as of the retroactive date.However, where a contract is ambiguous with respect to its effective date, the absence of an explanation for a retroactive effective date, and evidence that the parties had not agreed to the material terms of their contract as of the purported retroactive effective date, are relevant considerations in resolving the ambiguity.

Thus, the FDIC and Weatherford could have made their transaction retroactive, but they didn’t document the deal clearly enough to do so.There are any number of contexts where this comes up — some legitimate and others not exactly aboveboard — but the logistics of negotiating and signing contracts are such that the issue is unavoidable.(Jason Mark Anderman illustrates the logistics problem well in this comment to a backdating post on Ken Adams’s blog.) There’s nothing inherently illegal or unethical about backdating contracts, although backdating can certainly be both unethical and illegal, depending on the situation.The court stated the general rule that “a written contract becomes binding when it is finally executed or delivered, unless a different intent appears.” Although the face of the main agreement in the FDIC/Weatherford transaction expressed an intended effective date of November 7, 2008, ancillary documents signed in connection with the transaction weren’t backdated, and the main agreement didn’t explain why it was backdated.Due to this ambiguity in the contract documents, the trial court was permitted to look at the evidence of the parties’ intent outside of the documents, and it found that the FDIC didn’t acquire an interest in the loan until June 2009, regardless of the stated effective date in the main agreement.

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