A more thorough explanation:

The effective date refers to the date on which a legally binding agreement, such as a contract or statute, becomes enforceable and takes effect. This date may or may not be the same as the date on which the agreement was signed or executed.

• Employment Contract: An employment contract may have an effective date of January 1st, even if it was signed on December 15th. This means that the terms of the contract, such as salary and benefits, will not go into effect until January 1st.
• Insurance Policy: An insurance policy may have an effective date of July 1st, even if it was purchased on June 15th. This means that coverage will not begin until July 1st.
• Law: A new law may have an effective date of January 1st, even if it was signed by the governor on December 15th. This means that the law will not be enforced until January 1st.

These examples illustrate how the effective date is the date on which an agreement or law becomes enforceable, even if it was signed or executed on a different date.