Contracts can be complex documents. Depending on what the contract is for, you might have to do more than just sign it for it to be valid. Some contracts require a witness or witnesses to sign them, while other contracts have to be signed by a state-appointed official to prove their validity.
In other words, it’s up to you to make sure your contract is complete and accurate and that you’ve met the requirements for execution. To help you out, we’ve complied our top blog posts on contracts so you can easily find the advice you need.
What is a Valid Contract?
A valid contract typically needs to include several things: offer and acceptance, consideration, mutuality or intention, legality, and capacity. If one or more of these elements are missing, then the contract might not be considered valid.
Offer and Acceptance is typically what makes up the terms of a contract in that one party is presenting something of value that they wish to exchange with another party for something else of value (which would be considered the offer). The other party can then accept or decline the offer presented to them. Offer and acceptance can be as simple as paying money in exchange for a service.
Consideration is the benefit included in the contract. Consideration can be money, service, an object, or anything else of value to both parties.
Mutuality or intention means that the contract was created by the parties with the intention that the contract would be enforceable and valid. This might seem obvious, but if it is found that a contract was created with uncertainty from one or all of the parties, that may affect its validity.
Legality just means that the contract’s subject matter must be legal in the state or jurisdiction in which it is created. Essentially, individuals can’t form a contract around an activity, promise, or something else that is illegal.
Capacity means that the parties that will sign the contract have the legal ability to do so. Things like mental capacity, age, or financial standing are factors that might affect a person’s ability to sign a contract.
A contract would most likely be considered invalid if it:
- Does not include the necessary elements of a contract
- Was signed unlawfully (like by someone under the age of consent or someone with compromised mental capacity)
- Is otherwise found to be fraudulent (misrepresentation of facts or omitted information, evidence of coercion or influence from one or both of the parties, or terms of the contract were breached)
To avoid an invalid contract, it’s important that the parties involved read the contract thoroughly, understand its contents, pay attention to acceptance details, and ensure that the contract clearly states the offer.
How Should I Sign a Contract?
Signing contracts might seem straightforward, but it’s a process that shouldn’t be taken lightly. Your signature is a mark that identifies you and can be a reflection of your consent, so it’s important that you know why, when, and where to sign your name.
Generally, a contract doesn’t become binding or enforceable until all parties have signed the document with their signature. Sometimes a contract might require a signature from a notary public or a witness or witnesses before it can be valid.
Every contract is different, but most contracts or agreements have clear indications of where you should put your signature. Some documents may require you to initial every page, add your signature at the end of the document, or both.
Depending on the document you are signing and your local laws, how you sign a document (including what ink color you should use) can be an important thing to consider. Some organizations, jurisdictions, county clerks, notaries, etc. might have their own preferences regarding the ink color you use to sign your document.
Generally, blue seems to be the preferred color of ink to use because if you use black ink, it could be harder to tell if your signature is original or a photocopy. It’s also important to consider the quality of the ink you’re using: a cheap pen with poor-quality ink could leave your signature more susceptible to being altered or fading over time.
Do I Need a Witness?
Some contracts require the signature of a witness or a notary public in order to be valid. A witness is simply a neutral third party who is present when you sign your contract, and has to be someone who cannot benefit from the contract in any way. A valid witness usually needs to be the age of majority and of sound mind (clear mental capacity).
Some documents that might need the signature of a witness or a notary public are:
- Estate planning documents such as a Last Will and Testament or Power of Attorney
- Documents used for real estate purchases or transfers, such as property deeds
- Marriage-related documents such as a Prenuptial Agreement
- Documents that are a sworn statement of facts, such as an Affidavit
A notary public is a state-appointed individual who can verify that a legal document has been created correctly. Getting a notary public to sign your contract aids in its validity because the signature of a notary can indicate that the parties were not pressured or coerced into signing a contract, and that the contents of the contract are legal.
Signing Legal Documents
Before you sign a contract, you should educate yourself on everything that’s required to sign it properly. Check your contract to ensure that it includes all the basic elements, make sure you have a high-quality pen to sign the contract with, and be sure to check to see if your contract needs the signature of a witness or notary public in order to be valid. If you’ve done everything you need to do with you contract, it should be ready to be executed when the time comes.