The contract effective date is the date on which the contract becomes legally binding. This date is typically set forth in the opening paragraph of the contract. The parties are bound by the terms of the contract from this date onwards.
The effective date may be different from the date that the contract is signed, as it may be delayed if there is a condition precedent that needs to be fulfilled first, such as approval from a regulatory body. It is important to ensure that all conditions precedent have been satisfied before setting an effective date, otherwise the contract may not be binding.