The terms counterpart and counterparty are commonly used in the law but have very different meanings and it is important to distinguish between them.
A counterpart is a duplicate or copy of a legal document. If a contract is entered into by two parties, for example, two originals are often signed so that each party has in its possession one original, signed version of the contract:
“This agreement has been signed in two original, identical counterparts of which each party has received one.”
A counterparty, on the other hand, is one of the parties to a contract, transaction, trade, etc. In the above example, therefore, there are two counterparties:
“Both of the counterparties are required to sign the contract in order for it to be valid.”