Once the negotiation of an important agreement is finished there is usually a formal signing ceremony. The signatories themselves are usually directors, who have probably not been involved in the negotiation and often have little idea what the agreement contains.
Although in principle both parties are free to change their minds and not to sign, the signing ceremony is usually a formality. It can however be a nervous occasion for an experienced lawyer, who knows that anything that can go wrong will go wrong. This may prove embarrassing in front of the directors and sometimes the press as well.
The first significant transaction I ever did was the disposal of a small and failing plastics retailer, which had been acquired by BP in its ill-starred diversification of the 1970s. Failure is an orphan and I could not get proper instructions. So I did the best I could, negotiated the sale agreement with the buyer and set a date for signing.
The signatory was a senior executive, an intelligent and respected man who later rose to the main board of BP. As I handed him the signature copies he mouthed to me “Are these all right?” I assured him that they were fine and asked him to sign and date them. He signed with a flourish and promptly inserted the wrong day, the wrong month and the wrong year. We looked at each other, and he said, “Oh dear, that’s not right is it? What do we do now?” Trying to sound more confident than I felt I said, “Strike it out, put in the correct date, and initial the change.”
On reflection I could only conclude that he was as nervous about the occasion as I was. I learned the lesson. Never let the signatory do anything other than sign. Insert his name, his title and the dates yourself.
A legal analysis of the significance of a signature is given in our book Commercial Contracts. A more exotic story relating to signature ceremonies is told in another tale in this series, Lost Originals.
See also: Security