The term "effective date" refers to a specific point in time when something becomes active, valid or enforceable. It is commonly used in legal and business contexts where an agreement, policy, law or other document has been drafted with a future start date. The effective date marks the beginning of the period during which the terms and conditions of that agreement are to be followed. In some cases, it may also refer to the end of a grace period before certain rules take effect. Essentially, the term "effective date" signifies when something becomes operational or has legal consequences.