Contracts are essential for agreements, but they’re not valid without signatures. In many places, a signature is needed to make a contract legally binding, showing that both parties agree to the terms willingly and understand them. So, let’s discuss how contracts are usually signed to avoid disputes later.
Proper Ways to Sign a Contract
To sign a contract properly and avoid disputes, follow these steps:
- Prepare Carefully: Make sure the contract is clearly written with specific terms and obligations to avoid misunderstandings.
- Ensure Mutual Understanding: All parties should review the contract thoroughly and clarify any confusing terms to ensure everyone agrees on their responsibilities.
- Use Electronic Signatures: Opt for legally valid electronic signatures that make the signing process faster and more efficient.
- Keep Records: Save all communications and agreements related to the contract as evidence in case of future disputes.
- Include Dispute Resolution Clauses: Add clauses that explain how to handle disagreements, such as mediation or arbitration, to simplify conflict resolution if needed.
- Communicate Regularly: Stay in touch throughout the contract period to monitor progress and address issues early, reducing the chance of disputes.
Best Way to Sign a Contract
For most contracts, electronic signatures offer the fastest and most convenient way to finalize agreements without losing legal validity. They allow documents to be signed online, making it easier for people in different locations to complete contracts simultaneously.
Additional benefits of e-signatures include easy tracking of document versions, reduced risk of losing contracts, and access to analytics that simplify managing the signing process. Going paperless also benefits the environment, and digital storage with built-in audit trails ensures security and reliability. Features like encryption for sensitive agreements, branding options, and user-friendly software make electronic signing ideal for businesses of all sizes to handle contracts more efficiently.
That said, wet signatures might still be preferred in certain cases, such as when signing important contracts like real estate agreements or when specific legal or industry rules require them. Ink signatures can also provide a personal touch or serve as tangible proof of physical presence in some jurisdictions. Senior executives or others involved in formal agreements may see them as more traditional and appropriate.
However, electronic signatures are the better choice for most modern contracts, offering speed, security, and convenience while remaining legally valid. The advantages of digital signing often outweigh the traditional benefits of wet signatures.
Which Mistakes During Signing a Contract Lead to Disputes?
Mistakes during contract signing can lead to disputes, including:
- Unclear Terms: Using vague language like “reasonable” or “as soon as possible” can cause misunderstandings because each party may interpret them differently.
- No Written Agreements: Relying on verbal agreements can lead to conflicts since they’re hard to prove without written documentation. Always put agreements in writing to avoid confusion.
- Unspecified Payment Terms: Failing to outline clear payment deadlines or milestones can result in disagreements over financial obligations.
- Missing Dispute Resolution Clauses: Without clear methods for handling disagreements, such as mediation or arbitration, disputes may escalate into costly legal battles.
- Skipping Final Reviews: Contracts often change during negotiations. Not reviewing the final version carefully can lead to unintentional acceptance of unfavorable terms.
- Signing Under Pressure: A contract signed under duress or coercion may not be valid. Agreements must be voluntary and free from pressure.
- Mistakes in Terms: Errors made by one or both parties about key terms can invalidate a contract, especially if both parties aren’t on the same page.
Wrapping Up
When dealing with business contracts, understanding” how contracts are usually signed is beneficial. However, knowing the best methods to sign them helps you avoid pitfalls like contract disputes.
Need help with a business contract dispute case? Contact our seasoned business lawyer, Zeshaan Samani, at Edwards Sutarwalla Samani LLP. Dial (713) 565-1353 to make an appointment.