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.
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.
Accordingly, the best advice in relation to backdating documents will always remain: don't do it.
As a leading offshore financial centre, the Cayman Islands strives both to meet the varied and changing needs of those who utilise the jurisdiction as well as ensuring it maintains appropriate levels of regulation.
In such cases, where the parties are not legally advised, it is absolutely not uncommon for the parties to sign the agreement and then backdate it to the start of the commercial relationship believing that this will "catch" all the prior aspects of their relationship.
Legally speaking of course what they should do is put a provision in the contract which states that the terms of this contract shall also govern prior transactions which the parties shall henceforth treat as being regulated by those terms.
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.
However, he rarely adds that he actually ended up losing that trial, which brings us to my second point even though the law generally deprecates the backdating of documents, the legal consequences of backdating are highly variable.
This article will try to unpick the various legal threads of when you can and cannot backdate documents, and what the consequences will be if you do.
Slightly more tenuously, where the parties reached a binding agreement on a certain date, but only reduced it to writing on a later date, they might be justified in putting the date of agreement rather than the date of execution if the terms were in fact identical (a more likely scenario given the length and detail of many modern written contracts would be where the terms of contracts are agreed by e-mail on a certain date, but the parties were only available to sign the actual physical documents upon a later date).