QUESTION: We saw somewhere in the news recently, maybe it was 60 Minutes, that some sort of non-disclosure agreement may not be valid because it doesn’t contain a signature. We have all kinds of contracts that only have the signature of our CEO, not the other party. Should we be worried?
ANSWER: Were you watching the show during a dark and “stormy” night? Anyway, if the hospital’s contracts have a “counterparts” provision, no worries at all!
A counterparts provision basically recognizes that, sometimes, all of the parties can’t be in the same room together, at the same time, and sign the agreement. So, separate copies of the agreement are signed. This usually occurs in large transactions with many multiple parties, but can occur even in smaller transactions. In any event, none of the copies will have all of the signatures on them. So, if the CEO signs his or her copy, and the other party signs its copy, the contract is valid. If, say, the CEO wants to make sure the other party actually signed the agreement, the CEO could ask that party to send a copy of the signature page to the hospital.
A typical counterparts provision will state: “This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute a single Agreement.”
But, note that the absence of a counterpart provision may not in and of itself invalidate an agreement that the parties execute by separate counterparts. However, it helps to prevent a party from claiming that an agreement is not binding because there is no single copy of it that is signed by all the parties.
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