What does it mean to put pen to paper? Here’s everything you need to know about signing a contract, including what it implies and why you shouldn’t.
What you’ll discover:
Contracts that do not need a signature
Signatures are required on written contracts.
What Does Your Signature Indicate?
When Not to Sign
Feeling Confident
There are some important things to understand before signing a contract. Signing a contract indicates that you agree to the conditions contained inside, including, of course, what end of the deal you’re holding up. But did you know that certain contracts do not even need signatures? That is correct. Verbal contracts may be legally enforceable in certain instances, but if you want to protect yourself, it’s always a good idea to put it in writing.
These are some things you should be aware of before signing a contract.
Table of Contents
Contracts that do not need a signature
If you enter into an agreement with someone that has all of the components of a contract (offer, acceptance, consideration, and purpose), you are both competent to do so, and the transaction is for less than $500, you may not need to have a formal contract. That is, no signature is necessary.
Most experts agree, however, that since the parties may quickly forget the specifics of the agreement or differ on their interpretation, it’s preferable to have it in writing.
Contracts in writing: A signature is required.
Contracts involving more than $500 in exchange for commodities must be in writing, according to the Uniform Commercial Code (UCC) (UCC Section 2-201—commonly called the statute of frauds). Contracts for land sales must also be in writing.
It is important to note that “informal writing” (e.g., a memorandum on the back of a napkin that has all of the essential components, including the signatures of both parties) may meet the UCC’s statute of frauds as long as it demonstrates the intent to be bound by the contract. Yet, such signatures are unlikely to fulfill state standards for real estate paperwork.
Of course, the best thing you can do in any case is to draft a well-written contract and sign it online. Everyone’s duties are thus documented, and everyone has a legal copy.
What Does Your Signature Indicate?
Your signature essentially indicates that you have read the agreement, agree to its terms and conditions, intend to enter into the agreement, and are legally authorized and mentally competent to do so.
As a result, you should ensure that you understand all of the provisions of the agreement and that every “blank” in the paper is filled up. And, of course, collect the other party’s signature as well as a copy of the agreement with both signatures. (Signing a contract online allows both parties to have legal copies without having to deal with mailing, copying, or faxing.)
When You Shouldn’t Sign
It is often in your best interests not to sign an agreement:
that still contains gaps, whether for a date, an object, or a financial amount; if you feel threatened or under pressure; or if you don’t understand anything and want to discuss it with a lawyer.
Being Self-Assured
When you or a lawyer has created a contract on your behalf and you are already acquainted with its contents and wording, you will be most comfortable signing it. If you work in the service sector, you may find a free, customized, and professionally written service contract here. We also provide industry-specific service contracts. You may also discover a UCC-compliant contract for items if you are selling things.
