Introduction:
Signing contracts represents an official final deal of the business. Contracts signify an important final agreement that is made between the contracting parties. Under this agreement, the contracting parties outline their terms and conditions, which are covered under the governing law. For making a final approval of contracts, the signature is the most important clause. It doesn’t matter whether the signatures are physical or digital. If we talk about the traditional way, the contract was signed on a printed copy, manually signed with ink, which is legally binding.
Now, in this digital era, digital transformation is revolutionising modern contracting. But the core basis of the signing of the contract is: how are contracts usually signed by the contracting parties? In this article, we discuss the traditional way to sign a contract, how contracts are usually signed, and best practices for signing. So please stay tuned and read below.
The Traditional Way of Signing a Contract:
Before we dive deep into how contracts are contract usually signed. We should know that there are lots of processes that fall into place before signing a contract. Some of the common processes are listed below.
Drafting the contract:
This is the first step that is taken by the legal or expert team. They structure the contract to cover all aspects of the business needs and set up the terms and conditions accordingly.
Internal Review of the Contract:
Contract drafting is a difficult task; it needs more reviews before final approval. The legal expert teams review the contract and set it up accordingly with the determination of various departments’ needs. They cover all aspects of the business goal.
Contract Approval Process:
This is the final step of the contract; after completion of an internal review, the contract approval process will start with management or stakeholders. After completion of final approval, the contract is signed by the authorised party.
How Are Contracts Usually Signed?
In the past, we observed that contracts were signed in handwriting with wet ink. The contracting parties manually presented and signed a printed contract. After the parties signed, the contract would become legally enforceable under the law. We can say this is the only way to make a legally enforceable contract at that time.
These days, business interactions have become more global and digital, and the signature method has also grown and converted into electronic signatures. After that revolution, physical contracts have become legal digital documents, and a manual physical signature has been converted into an e-signature. It provides convenience for the contracting parties’ approval and acceptance without physical presence.
What is the Best Way to Sign a Contract?
These days, electronic signatures are a convenient way to sign contracts online. By using an electronic signature, the contracting party can finalise a business agreement more quickly and conveniently without being physically present. Using this method does not affect the legal validity of the contracts; they are treated as legally valid and binding on the contracting parties.
Different Methods of Signing Contracts:
There are different methods that can be used to sign a contract, which can vary depending on business needs or industry purpose. Some of the common methods are listed below.
Wet Signatures (physical signing):
A wet signature is referred to as a physical mark or handwriting made by a person on a physical document. A signature made using a pen or ink. It is called a wet signature name by using an ink that is literally wet and applied to the physical paper or document. This method is traditionally physical signing compared to modern electronic or digital signatures. The wet signature is commonly used in selected specific sectors such as real estate, government-related documents, and healthcare.
Advantages of wet signatures:
- It is a very popular method and legally recognised everywhere.
- There is no need for technicality or signature tools.
Disadvantages of red signatures:
It is an old and slower process for making a contract. The contracting parties must be present at the time and make their signature on physical paper.
Electronic Signatures (e-signatures):
Electronic signatures have become the fastest method adopted by most businesses these days. There are many online signature tools available in the market, such as DocuSign and Adobe Sign. By using these tools, the parties can sign and send their contracts within a few minutes. That’s why it has become fast and efficient, saving lots of time and paperwork for the contracting parties.
Advantages of electronic signatures:
- It has become more popular and legally binding in most countries, and the signature process is very fast and easy with this signature method.
- It is also beneficial for the contracting party. By using this method, they can cut down on paperwork and storage issues.
- It is used in most business agreements, vendor contracts, employee and employment forms, and many other types of contracts.
Digital Signatures:
Digital signatures look the same as e-signatures. It is a very secure signature method; it collects and verifies the identity of the signer and protects the documents. These methods are commonly used where security is most important, such as finance, legal, banking, and sectors that deal with highly sensitive data.
Best Practices of Contract Signing:
There is no matter which process you follow for signing, the core aspect is that you need to keep the process smooth. There are some key factors you need to consider before signing a contract.
- Make sure to verify who’s signing: before signing a contract, you need to make sure to verify whether that contract has been made with an authority or not. It will help to prevent future issues.
- Agree with the contract terms: before signing a contract, you need to verify all the contract terms, and if you are angry about that, you may sign the contract whether it is in a digital form or by a manual physical method. Because misunderstanding creates more issues later on, it leads to unnecessary legal issues.
- Keep your contract close: after signing the contract, you need to keep it handy. It doesn’t matter whether the contract is physical or digital, but make sure you keep secure and safe place.
Challenges in the Contract Signing Process:
There are some challenges that you need to know about the contract signing process. Some of the common challenges are listed below.
Waiting for Approval Issue:
This is a common issue that you often face, such as delays or a slow process.
Communication:
This issue will arise when the contract terms are not clearly mentioned on the same page. It may lead to unnecessary frustration or the need for detailed clarification related to the terms.
Unauthorised Signatures:
The issue will arise when a party who is not really authorised to sign the contract however, they sign it, it may lead to a legal issue later on. So, it is advisable to make sure who is the signatory and who signed the contract.
Are Electronic Signatures Legally Binding on a Contract?
The answer to this question is yes. Electronic signatures are also legally binding on a contract, it creates a legal obligation for the contracting parties and are enforceable in a court of law. E-signatures are also legally valid and it also carries equal weight, the same as a wet signature. These days, the global and digital eras are evolving in the business sectors. And that’s the reason e-signing and digital signing are the most convenient and popular methods to sign contracts. In the process of digital signing, the consent of parties must be obtained, and after approval, the documents are legally binding, the same as physical signatures.
When the contracting parties execute a contract using secure digital technology for signing purposes. They ensure their identity and consent to the digital e-signing, which is equally valid and enforceable under the law.
What You Need to Know About How Contracts Are Usually Signed:
Ink signature methods are old and the sole standard for contract validation. But now, these days, the signing process for an agreement has increased and become more efficient. By using a digital technology platform, the contracting party can easily sign the documents via digital signature or E-signature. In this process, the consent of the signing party must be obtained, and after reading all the terms and conditions, the parties put their signature.
Thus, such a contract becomes legally valid and enforceable under the law. If the contract is breached by any party, the injured party can also pursue legal remedies and protect their rights towards the contract.
Conclusion:
No matter how you are using the signature method to sign a contract. You may use wet signatures, a click, or an encryption method to sign a contract. But the core question is: how contracts are usually signed is a key factor for running your business in an efficient way. There are different signature methods, like wet signatures, e-signatures, or digital signatures, that are often used to sign a contract. That depends on the nature of the contracting process. But as a contracting party, you should know all about the signature methods and processes.
