Last month, this column looked at the terminology that is used in English and Chinese to describe contracts and agreements. This month’s column follows up with an analysis of terms that are used when parties enter into a contract or agreement.
In English, lawyers may talk about a party to a contract “executing”, “signing” or “entering into” the contract. Is there any difference between these terms or do they all mean the same thing?
Lawyers often use these terms interchangeably. However, there are some points of difference. Although much depends on the context and the ways in which these terms are treated by case law and statute, it is possible to draw some simple distinctions.
The primary difference between “execute” and “sign” is that “execute” refers to the act by which a contract is brought into effect (i.e. the act by which a contract becomes valid and enforceable). In many cases, it will be sufficient for a party simply to “sign” the contract.
However, there may be additional requirements that need to be satisfied before the contract can come into effect. For example, it may be necessary for the contract to be witnessed. And in the case of a deed, the traditional requirement was for the document to be “signed, sealed and delivered” (see further below).
A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at www.vantageasia.com