Introduction
Contracts are legally binding documents; they set the terms and conditions for specific purposes. After it is signed by the parties, it becomes a legally binding agreement. The contracting parties are accountable for their parts of the terms and conditions related to the contract.
However, the main question that comes to our mind is, “Does an agreement need to be signed by both parties?” To get a perfect answer to this question, we need to go in-depth. Commonly, the contracts need to be signed by parties; to get the effects of the terms and conditions. It also shows that they agree with the terms and conditions and by putting their signs on the agreement make it valid. We also need to know certain types of contracts are not mandatory required to be signed by the parties, however, the court of law deems those contracts valid.
What does the contract mean?
A contract is a legal document made between two or more parties who agree upon certain terms for consideration.
A contract can be made between individuals, business organizations, or employers and employees. There is no subject matter defined for entering into the contract; however, it is accepted that the object of the agreement should be lawful.
Each contracting party is bound to the terms and conditions; if they fail to perform the contract of their part, it counts as a breach of contract. There are different types of contracts that can be used according to the purposes of the parties. To make a legally valid and enforceable agreement, there are some essential elements that need to be required. Such as:
Mutual consent:
It is a significant element of the contract. The promise must be made between the contracting parties on the basis of consideration. Mutual consent must be presented when the parties agree upon the offer and acceptance.
The offer and acceptance:
The offer and acceptance play a crucial role in the formation of the contract. In this, one party makes an offer, and another accepts it with the same meaning and understanding.
The intention of the party:
A legally valid contract requires the party’s intention. If this element is lacking, the contract is not legal and enforceable.
The capacity:
The capacity of the party is a significant element of every contract. That may vary according to the contract and country. For example, some countries allow the legal age of a person to enter into the contract to be 18 years, while other countries may differ in these criteria.
Legality:
The legal object must be required to make a legally enforceable contract. If the object is not legally valid, the formation of the contract based on that becomes invalid and said contract may be declared as an unenforceable contract.
Is every contract required to be signed?
Yes, certain types of contracts are required to be signed to make a legally valid and enforceable by law.
However, certain types of contracts, such as oral agreements or contracts without signed contracts, can be enforceable under contract law. However, a lack of strong evidence may make them difficult to prove in court. Therefore, it is advisable to create a written contract that all contracting parties must sign. This protects the rights of the parties involved and creates good relationships.
The way to sign contracts by the parties
There are different options available for signing a contract, like handwritten or wet signatures and electronic signatures.
Handwritten signatures are very popular and commonly used for the signing of contracts. But now, it has evolved and converted into digital signatures form as electronic signatures that have also become a popular method of signatures.
In previous years, the agreement signing process was much more complex and time-consuming in the business world. For example, one party prints a document, and the party puts their sign and it is sent to the other party for signing. Sometimes, it may result from a human error or other mistake.
Now, the digital world has had a positive impact on the business world. Physical signatures are replaced by electronic signatures, which digitally represent a person’s physical signature. In the same manner, the party accepts the terms and conditions of the contract and signs via electronic signature, making it legally enforceable.
Electronic signatures are easier, more secure, and faster compared to physical signatures. By using this method, the party does not need to print or scan contracts, put their physical sign, and send it to another party for the same process as the traditional method. The parties can easily get a copy of the contract as well as send it to anyone online.
How can the party sign an electronic signature?
For creating a legally binding contract, the party’s signature must be required, whether it is physical or electronic. There are different ways that can be used for making a digital signature in a contract.
Certain software, such as Microsoft Word, provides this facility, which includes a signature function to allow users to add a digital signature to documents.
There are some risk factors using a word-to-sign function for the signing of a document. Because it is an additional feature that is included in the software. It is a complex process to add an electronic signature in Microsoft Word. It may be a time-consuming process, and it needs proper training for that.
Sometimes, the contracting party is not aware of how to send executed contracts and track the process, whether recipients got it or not. It is also difficult to manage when the organization needs to send high-volume contracts day-to-day because of the training staff required which is an expensive method.
Contracts that do not require a signature
Certain types of contracts do not require signatures for validation and are still valid without a signature. They are listed below:
Oral or verbal contracts:
In some cases, oral contracts (verbal agreements) are also legally binding to the parties involved. If the other essential elements are met, such as offer acceptance, considerations, mutual free consent, etc., and are accepted by the parties, it will become binding to them. However, one thing that should be noted is that there is no physical proof of evidence in the verbal contract because the contract is made verbally, so it is difficult to prove in court.
Implied contracts:
Implied contracts are made by acts and expressions, but not in written and verbal form. Let’s see an example for a better understanding of implied contract: Suppose Mr. X goes to a restaurant and orders food; it is an implied contract. Because Mr. X eats food and pays the bill.
Digital Agreements:
Now, with the evolution of the digital era, most business organizations have adopted digital technology in business transactions, and digital agreements are also among them. These types of agreements have legal weight and they are considered as a valid contract. It provides valid proof as evidence that the contracting parties agreed with the terms.
How to prove an unsigned agreement in court?
There is a legal process that is required following by proving an unsigned agreement in the court. To decide whether an agreement without a signature is valid, the parties must satisfy the court with additional alternative evidence, such as:
The intention of the parties:
The contracting parties need to adduce evidence that explains that the parties clearly intended to create an agreement. Additional evidence can include emails, text messages, bills, letters, etc. The court will observe all the evidence to decide whether the parties intended to create a binding agreement.
Communications:
The court may also observe how the contracting parties communicate in relation to the contract. If it is found that the parties discussed previously and acted upon it, it is believed they had made a binding agreement, and the court may order to enforce it.
Performance of promises:
If the contract parties started performing upon obligations, under the terms of an agreement. Such as making payment, supplying goods, etc. it is the best evidence to prove a said contract exists between them. In that situation, the written and signed agreement is not required as proof of evidence.
Evidence of other witnesses:
To prove an unsigned contract in court, the party can adduce other witness statements in the court. They can explain to the court their acknowledgment of how the parties entered into the contract.
Conclusion:
An agreement indeed needs to be signed by the parties involved to make a legally binding contract. In some scenarios, there is no mandatory requirement of the signature in contracts, but it still counts as a legally valid and binding agreement. In some cases, unsigned and non-written agreements are considered as binding agreements. All of these scenarios depend upon the types of contracts, jurisdictions, and laws. These vary from country to country.
However, certain types of contracts are mandatorily required to be in writing, while some contracts are also valid even if executed verbally, expressly, or implied. However, every contract needs to be signed; it will help the parties avoid disputes and make a healthy relationship between them. A signed agreement can be used as evidence that protects the rights and enables the parties to enforce it in the event of breaches.
Also Read:
How To Write An Agreement Between Two Parties?
Five Most Common Business Contracts
What is a Sales Contract? 12 Essential Things You Need to Include
