The Handshake: How Informal Agreements Begin
A business partnership often starts with a simple handshake and a verbal agreement to work together. These informal arrangements can be a great way to get things off the ground, but as your venture grows, it’s important to put key terms in writing.
Handshake deals may be fine when you’re just starting out, but as time goes on, memories can fade and misunderstandings arise. To avoid confusion and conflict, you’ll want an official contract that spells out the specifics of your partnership in a clear and legally-binding way.
A good partnership agreement will cover things like:
- The responsibilities and contributions of each partner. Lay out who will handle what and how work will be divided.
- Ownership stakes and profit/loss sharing. Make it crystal clear how the business’s assets, debts, and financial gains or losses will be distributed between partners.
- Decision making authority. Establish a process for resolving disagreements and determine who has the final say on important business matters.
- Restrictions on transferring ownership. Include clauses preventing partners from selling their stake to outsiders without approval.
- Exit strategies. Discuss how partners can leave the business, sell their shares, or force dissolution of the partnership. Planning for the end at the beginning will save headaches later on.
While handshakes and verbal promises are a good start, to build a partnership that lasts you need to get key details in ink. A thoughtfully crafted agreement can help avoid conflicts, ensure fair treatment of all partners, and set your business up for long term success.
Sign on the Dotted Line: Understanding Written Contracts
Once you’ve negotiated the terms of your agreement, it’s time to make it official with a written contract. This legally binding document spells out what each party has promised to provide or pay.
To be valid, a contract must have a few essential elements. First, there must be an “offer” to exchange goods, services, money or other consideration. The other party must accept that offer for a “meeting of the minds.” There also must be “consideration” — something of value exchanged, like money, goods or services.
The contract should outline key terms in detail, like:
- What each party agrees to provide (goods, services, money, etc.)
- Timeframes for delivery or payment
- Pricing, fees or payment schedules
- Responsibilities and expectations of each party
- Potential penalties if a party does not fulfill their obligations
Finally, for a written contract to be legally binding, authorized representatives of both parties must sign and date it. Digital or electronic signatures are also acceptable in many places. Once signed, each party should receive a copy of the final agreement for their records.
Contracts don’t have to be complicated, but they must clearly capture the specifics of your understanding in a way that can be enforced if needed. With a little time invested upfront, you can have confidence in a fair, mutually beneficial deal and a partnership built to last.
Witnessing the Signing: Having Your Signature Notarized
To make a contract legally binding, the signatures of the parties involved must be witnessed by a notary public. A notary helps prevent fraud and ensures your signature is authentic.###
Notarization is a simple process. Once the contract is signed, take it to your local bank, shipping center, or wherever else a notary is available. They will review your ID to verify your identity and have you sign again in their presence. The notary will then complete and sign the notary certificate on the document, which includes information like the date, your name, and the notary’s commission expiration date.
Some key things to know for notarization:
- Bring a valid government-issued photo ID like a driver’s license or passport. The names on the ID and contract must match exactly.
- Only sign the contract in front of the notary. Do not sign in advance.
- The notary will administer an oath or affirmation, then will instruct you to sign. They will witness your signature to confirm it is really you signing.
- Notarization requires a small fee, typically around $5 to $10 per signature. Fees vary in different states and countries.
- Notarized contracts are legally recognized across all 50 states and most foreign countries. They provide strong evidence in court if the contract is ever disputed.
- You can request copies of the notarized contract for your records and the other parties involved. The notary will emboss or crimp their notary seal on each copy to show it is an official duplicate of the original.
While technology has introduced e-contracts and e-signatures, traditional paper contracts witnessed by a notary are still commonly used for high-value agreements or in industries where a handwritten signature is preferred. For these important contracts, taking the time to have your signature notarized can provide invaluable legal protection and peace of mind.
Having your signature notarized online
If the contract you need to sign requires your signature to be notarized, doing it online is often the most convenient option. Notarization simply means having your signature verified as authentic by a licensed notary public.
1. Find an online notary service
Many websites offer secure online notarization, like BlueNotary which allows you to get legal docs signed start to finish in less than 10 minutes.
2. Prepare/Upload your documents
Upload your documents. Be aware that the notary cannot notarize an incomplete or unsigned document.
3. Connect with a notary on video call
At your scheduled time or on demand, log in to the video call with the notary. They will verify your identity checking against public databases.
4. Sign while the notary watches
The notary will witness you signing the document in real time on the video call. They will then notarize the document, affixing their seal and signature.
5. Immediately Receive your notarized documents
The notarized documents will be immediately available to you. Check that all pages have been properly signed and notarized before considering them official. Originals can be mailed to you for an additional fee if required.
Online notarization is legal and enforceable in most states. It provides a quick and easy way to get your John Hancock notarized on important documents while avoiding the hassle of finding an in-person notary. Just make sure you use a reputable service, prepare thoroughly, and follow all instructions for a smooth online notarization experience.
FAQs: Common Questions About How Paper Contracts Are Signed
What is a “wet signature”?
A “wet signature” refers to a handwritten signature using ink on a physical document. This is the traditional way contracts and agreements have been signed for centuries. When you sign on the dotted line of a paper contract, you are providing your wet signature.
Why are wet signatures still used?
Although electronic signatures are becoming more common, wet signatures are still frequently used for important legal documents because:
- They provide an original signed record. Paper contracts with wet signatures can be kept as legal originals.
- They are familiar and trusted. Wet signatures are traditional and help people feel more at ease signing an official document.
- They may be legally required. Some contracts, like real estate paperwork, may still require a handwritten signature to be legally binding.
How are wet signatures verified?
To verify a wet signature, the signature can be:
- Compared to other examples of the person’s signature. Signatures on official ID like a driver’s license or passport can be used for comparison.
- Checked against the person’s normal signature style and letter formation. Those familiar with the person’s signature, like a notary public, can determine if it looks genuine.
- Examined by a handwriting expert. A forensic document examiner can analyze the signature to check for signs of forgery. They look at characteristics like the speed, skill, and spontaneity of the writing.
What makes a wet signature legally binding?
For a wet signature to be considered legally binding, several conditions must be met:
- The document must be signed by a person with the legal capacity to enter into a contract. They must be of sound mind and legal age of consent.
- The signature must match the name of the signing party as it appears in the contract. Nicknames or initials will not suffice.
- The contract terms and signature line must be clear and unambiguous. It should be obvious what is being agreed to and who is signing.
- The document must be signed voluntarily. Signatures obtained through coercion, deception or forgery will not be legally valid.
- Proper witnessing or notarization is required for some contracts like wills, deeds, and power of attorney documents. Notarization helps verify the signer’s identity and signature.
Conclusion
So there you have it, a quick overview of how paper contracts typically get signed to become legally binding. While digital signatures are gaining more popularity, the good old fashioned handwritten signature still reigns supreme for many important life documents. Whether you’re buying a house, leasing an apartment, or starting a new job, you’ll likely encounter a physical contract that requires your John Hancock to make it official. Next time you’re handed a stack of papers to sign on the dotted line, you can do so knowing exactly what’s involved in that seemingly simple act of putting pen to paper. Now get out there and sign away, you’ve got this!
