Parties seeking to enforce rights can find those rights barred by ancient common law doctrines like (“from a dishonourable cause an action does not arise”).In certain cases a criminal act may negate insurance.
But even if there is no crime committed (for example, if the backdating was accidental so that there was no (“not my deed”) or the rule in Pigot’s Case such that in the eyes of the courts, the document is treated as though it does not exist.
However, such doctrines are normally limited to situations where one party backdates the contract without the knowledge or consent of the other.
Although criminal prosecution might be a risk in serious fraud cases, in most day to day legal matters where backdating occurs for reasons of administrative convenience, or simply by oversight or error, the risk of being charged with a crime are commensurately small.
But even if a person is not charged with a crime, the fact that a crime can be demonstrated to have occurred may still impact the rights of the parties.
The first and most important thing to note about the consequences of backdating a document is that it is potentially a criminal offence.
When we say “backdating” what we usually mean is executing a document and then dating it with an earlier date than the actual date of execution, with the intention that it should be treated as giving rise to legal rights before the actual date.
For execution as a deed the requirement of signing is a crucial part of the process of creating rights by way of deed, and so it is never permissible to backdate a deed.
Probably the most difficult of the grey areas occurs where parties have a recurring commercial relationship which starts informally, but they later decide to document it and agree terms.
Where both parties consent to the backdating of the document, normally the courts in common law countries will simply disregard the backdating of the document, and treat the rights as accruing from the date when the document was actually executed.
Although in exceptional cases – where third party rights are not affected – the courts might be persuaded to treat the stated date as being the effective date, a situation we return to below. There are rare occasions when it may be permissible or even justified to do so.
At the very least a party seeking equitable relief will struggle to meet the test of “clean hands” which the courts require.