Are you curious about the contract signing process?
What does it mean to sign a contract, how should you do it and what are the best practices before signing a contract?
In this article, we’ve got what you’re looking for.
We have divided this article into the following sections for your ease of reference:
- What is contract signing
- What does your signature represent
- How can you sign a contract
- Who can sign a contract
- Things to do before signing a contract
- Place of signing contract
- Contract signing without authority
- Should you initial all the pages of a contract
Let’s get started!
What is contract signing
Fundamentally contract signing is your formal acceptance of the terms and conditions outlined in the document or the contract.
Contract signing is also the process of apposing your personal and unique signature on a document indicating that you are the party to the contract or you are acting on behalf of another party.
When a contract is signed, we typically refer to that document as a legal document.
Signing legal documents implies that there is an actual document on which the terms and conditions are written, either physically or electronically.
A contract does not necessarily need to be in writing or even signed unless the law expressly imposes a written contract for it to be valid.
A verbal contract is as legally binding as a written contract.
Although the content of a verbal contract will be more difficult to prove, the best practice is to write out the terms and conditions of your contract in a document that you will ultimately sign.
By signing a contract, you are undertaking to assume your obligations outlined in the contract and you expect your other contracting party to perform its end of the bargain.
What does your signature represent
Signing a contract means that you are agreeing to the terms and conditions of the contract.
By signing a contract, you are acknowledging that you are satisfied with the terms and conditions found in the contract, that you’ve read and understood those terms and that you are accepting to be legally bound by them.
Your actual signature is a formality confirming your intention to contract, the expression of your consent and your agreement to undertake the obligations outlined in the contract.
How can you sign a contract
Contracts can be signed in several ways.
Each jurisdiction will have its own contract law signature rule.
Traditionally, contracts were signed on physical paper where the parties would affix their signature by physically marking the contract in ink.
The contracting parties would sign several copies of the same contract so each party can keep a fully signed version for their records.
As technology evolved, businesses started exchanging contract signatures by faxing a document to one another.
As a result, the parties could sign a document and consider the faxed signature as if it was an original signature.
To ensure this was the case, parties would even include a clause in their contract that a contract signed by facsimile was deemed to be an original signature.
Ultimately, with the digitalization of our data, documents and business exchanges, contracts can now be signed using digital platforms designed to this effect.
Contract signing online is now common in the business world.
Many platforms now exist allowing parties to digitally execute and sign a contract in a secure way.
Each country or jurisdiction will have its own contract law signature rules, some allowing contract signing online and some have more reluctance in authorizing it.
You must make sure you understand the laws applicable to your contract to ensure you sign it in a legally binding way.
Who can sign a contract
In all instances, signing legal documents are done by humans.
Each person will have a unique signature identifying them.
A person’s signature will prove that an identifiable person has signed and approved the content of a contract.
The same person can sign on behalf of another person or entity.
As such, a person can sign for and on behalf of:
- A company
- A partnership
- A government
- The estate of a deceased person
- A non-profit organization
- On behalf of another person
- On behalf of a person who is inapt
The law allows a person to legally sign on behalf of someone else provided the person signing has followed the legal requirements to ensure the contract is legally binding on the third party and not on himself or herself.
Things to do before signing a contract
What should you do before you sign a contract?
Are there best practices or things to consider before binding yourself in a contract.
Before you enter into a binding contract you should:
- Make sure you fully read the terms of the contract including the fine print to know what you are getting into
- Make sure you do some research on the other contracting party to ensure they are legitimate and have a good reputation
- Negotiate the terms and conditions you do not find to your advantage
- Contact a contract lawyer to get advice on the applicable law or have them read the contract for you to ensure you fully understand its meaning
- You should also take your time in negotiating your contract so you give your consent freely without any pressure
If you keep these things in mind, you should be in a good position to sign your contract.
Place of signing contract
The place of signing of a contract may have different meaning depending on the laws applicable to the contract.
Under Quebec contract law, a contract is considered as formed at the place where a party accepts the offer.
This means that in the event of a dispute, the court of the district where the contract was signed by the accepting party will have jurisdiction to hear the dispute.
In most cases, a contract’s signature page will state where a party has signed.
A party signing the contract will put his or her name, date, signature and place where the contract was signed.
This is done to make it clear as to where the contract was signed in case a court’s territorial jurisdiction must be established.
Contract signing without authority
What happens if you sign a contract without having the capacity to do so?
To sign a legally binding contract, you must have legal capacity.
Having legal capacity means that you have the mental capacity to understand what you are doing and what you are getting into.
There some people that are not deemed to have the legal capacity to sign such as children or those mentally ill.
Contract signing without authority will lead to its nullity.
In some cases, if you ordinarily have the legal capacity to sign but you are under the influence of drugs or alcohol, you may temporarily not have the capacity to enter into a contract.
You must be careful however.
The courts will not authorize a person to negate a contract due to their own voluntary intoxication.
You cannot invoke your intoxication to avoid your legal obligations resulting from the contract you signed.
On the other hand, if someone is intoxicated against their will or is so intoxicated that the other party takes advantage of the situation, then the contract will be declared null by the court.
Should you initial all the pages of a contract
In most cases, initialing all the pages of a contract is not legally required.
In commercial transactions, most businesses will have all the pages of their contract initialed to prove that each page is in fact an actual part of the contract and that the terms of that page have been read and approved.
In some legal instances, when the law requires, each page of a document or contract will need to be initialed.
For example, under article 728 of the Civil Code of Quebec, when a will is written by a third person or electronically, the testator and the witnesses must initial or sign each page of the will.
In most cases though, it’s not a legal requirement to initial each page of a contract but more a preference.
Here you have it, all you need to know about contract signing.
Signing a contract is a significant operation as it is the moment in time where you recognize and agree to be bound by the terms and conditions of a contract.
You can sign physically sign a contract on paper or sign electronically depending on your jurisdiction.
More and more, digital signatures are accepted by different countries and legal systems.
You can sign a contract for yourself or on behalf of someone when legally authorized to do so.
Contract signing is crucial to formalize the legal relationship with your contracting party.
We hope that this article was useful.
We wish you all the best!