Counterparts

Signing in counterparts means that the parties do not all sign the same piece of paper. Each signs its own copy of the identical text, and the copies together make up one agreement. The practice exists because the people who sign are rarely in the same room.

Picture a seller in one city and a buyer in another. Each prints the final contract, signs it and sends the signed copy to the other side or to the lawyers. Nobody holds a single document with both signatures on it. A counterparts clause states that this is intended: the contract may be signed in any number of copies, and all of them count as one instrument.

Whether the clause is legally necessary depends on the law that governs the contract. In many cases the agreement would stand without it, but the clause removes the argument. Documents that must take a particular form, such as a notarial act, follow their own rules.

The main risk is that the parties did not sign the same text. Counterparts only form one agreement if they are identical, and with paper or scanned copies nobody can see that at a glance.

The risk grows in a virtual signing, where signature pages are signed in advance and sent by email. A page signed on Monday may be attached to a draft that changed on Tuesday. The safer practice is to circulate the final document, have each signatory return the signed page together with that document, and record who authorised the pages to be released. Whether a signature page signed separately from the text is enough at all depends on the governing law and on the type of document.

A second problem follows from the same cause. It can happen that nobody holds a complete set of signed copies. A party then cannot produce the other side's signature when it needs to.

Electronic signing lets every party sign one document, so separate copies are no longer needed. Each signature is added to the same file, one after another or in parallel, and the finished file carries them all.

This removes the question of whether the copies match. Under Article 26 of the eIDAS Regulation, an advanced electronic signature is linked to the signed data in such a way that any later change is detectable. A qualified signature meets the same requirement. Each signature therefore fixes the text it was applied to, and a validation check shows whether anything changed afterwards.

The legal footing is the same as for any electronic signature. Article 25 says that it cannot be denied legal effect solely because it is electronic. Article 2(3) leaves national rules on form intact.

Counterparts do not disappear altogether. Some signing tools still give each party its own copy to sign. Some deals mix paper and electronic signatures, with one party signing by hand. In both cases the contract is again signed in counterparts, which is why many contracts keep the clause and add that electronic signatures are accepted.

The signed electronic file is the document to keep. Article 46 of the eIDAS Regulation says that an electronic document cannot be denied legal effect or refused as evidence solely because it is in electronic form. Every party can hold the same signed file, and each copy of it can be validated in the same way. Whether a court or an authority treats it as an original is a matter of national law.

A printout does not replace it. The signatures exist as data inside the file, and paper cannot be validated. Keep the signed file unchanged, with the validation report and the record of when each person signed. Where paper counterparts were used, keep every counterpart received and the message that delivered it.

Advisers have one duty of their own. Under Article 77 of the EU Anti-Money Laundering Regulation, an obliged entity keeps a copy of the documents and information obtained in customer due diligence for five years from the end of the business relationship. That covers the identity and authority documents of its own client's signatories. How long the contract itself is kept depends on national law.

Each adviser covered by anti-money laundering rules identifies its own client and the person who signs for that client. Article 20(1) of the EU Anti-Money Laundering Regulation lists the measures. They include identifying the client and verifying its identity, and verifying that anyone acting on the client's behalf is authorised. Article 19(1)(f) applies the measures again when there are doubts about whether the person the firm is dealing with is the client or someone authorised to act for the client.

Counterparts make this harder in practice, because nobody watches the other side sign. A signed page arrives by email, and the recipient has to trust that the named person signed it. An adviser's checks concern its own client, so the other side's signatories are normally not identified by it. The exception is a notary or lawyer who is the only legal professional intermediating the transaction. Both parties then count as that professional's customers (Article 19(6)(b)). Each party still wants to know that they had authority, which is why evidence such as a board resolution or a power of attorney is often exchanged before signing.

The signature level helps with one part of the question. A qualified signature rests on a certificate that is issued only after the provider has verified the signer's identity (Article 24(1) of the eIDAS Regulation). It shows which person signed. It does not show that the person was entitled to bind a company.

The EU Anti-Money Laundering Regulation applies from 10 July 2027 (Article 90). Until then, the national laws that implement the EU anti-money laundering directives apply.