Your signature is your official stamp—your seal of approval. Whether you’re agreeing to an Employment Contract, finalizing mortgage details for your home, or witnessing a document, you will likely sign your name many times throughout your life. Since so many types of documents (not only legally binding contracts) require your signature, it’s important to protect yourself with proper signing habits.
Read more: What Do I Need to Sign a Contract
What is a Signature?
A signature identifies the individual who created it. It commonly spells out a person’s name in a visually distinctive way. Unless legally expressed, a signature can use loops, ascenders, descenders, special characters. Since a signature is meant to verify a person’s identity for authorizing documents and agreements, it should remain consistent from contract to contract.
Why Do I Have to Sign a Contract?
Most contracts do not become legally binding until they have the signatures of every party involved. By signing a document, you confirm your intention of executing the terms in the contract.
Who Signs a Contract?
A signatory is a person (or sometimes an organization), who signs an agreement or contract. If an organization is a signatory, a representative signs their name on behalf of the organization. Signatories must be the age of majority and involved in the execution of a document. For instance, if you and your partner create and sign a Prenuptial Agreement, you are both signatories.
A signatory can refer to a:
- Limited liability corporation
- Non-profit organization
- Government body
If a company is involved in a contract, such as a Purchase of Business Agreement, an individual who has legal authority would sign the document on the company’s behalf. A company signatory can be specified through a Directors’ Resolution, stating that the director or officer is able to sign documents for the corporation.
You can create a Power of Attorney and appoint a representative to sign real estate, financial, business, or other legal documents on your behalf. As this is an important duty, you should plan ahead and assign someone this responsibility in advance. For example, having a Power of Attorney is helpful if you suddenly cannot handle your own affairs due to health complications.
Each legal contract, state, and banking institution has its own requirements regarding whether a witness or notary public must sign to authenticate a document.
Witnesses are neutral third parties who verify each signatory’s signature. They do not have to be familiar with the terms of the agreement. Their signatures simply prove a contract’s validity and authenticity in a court of law.
A witness cannot be related to any of the signatories and cannot benefit from the contract. For example, a beneficiary of a Last Will and Testament cannot witness its execution.
A notary public is a state-licensed official who authorizes the identity of each signatory and witnesses the execution of a document. A notary also administers oaths, certifies copies of documents, and provides acknowledgements. Whether or not a document requires notarization (the process of getting your document signed by a notary public) depends on state legislation and financial institution regulations.
Generally, when a notary public verifies the execution of a document, it becomes a “self-authenticating” document, meaning it is not necessary to prove the validity of the signatures in court.
Where Do I Sign a Contract?
The last page of most legal documents is the signing page. While each document varies, signing pages generally contain solid lines with each signatory (or company) name underneath, indicating where to sign. On a signing page, you may also need to print your name, fill in your contact information, or provide the date that you signed.
Often a notary public has a separate section on the signing page to certify their acknowledgment of the contract.
Additionally, an Affidavit of Execution may require a notary or witness’s signature to make a sworn statement of a contract’s content, as well as each party’s age, identity, and signature. The notary may use a stamp or seal as formal authentication of the document.
Normally, the location where the document is signed does not matter as long as each party signs it in front of a witness or notary public.
If you would like your document to be valid in another country, your state’s government officials may need to issue an authentication certificate. This extra step can confirm your document’s authenticity. Every country has different requirements for obtaining authentication certificates. Always check with your state officials before executing a document.
Where Do I Initial a Contract?
Though it’s not legally required for most forms, a Last Will and Testament and Power of Attorney usually instruct each signatory to initial every page in addition to signing the last page.
Your initials prove you have read and agreed to all terms. They also prevent additional terms from being added after a document has been signed. Specifically, in a Last Will and Testament, signing initials can prevent future misunderstandings with an individual’s assets after their death. Although there is no formal space for initials, each party should initial the same spot on every page.
To make small edits to a legal document, cross out the term in question, write the alterations, and have each party initial next to the changes. Larger changes may require an amendment or separate document.
Read more: How to Initial a Contract
How Do I Sign a Contract?
Sign your legal documents the same way you sign checks, government identification, or other documents. For instance, if you go by your middle name on paper and in person, sign that way unless otherwise stated. A notary public may ask to see your identification card to confirm your identity and compare signatures.
When you sign a contract, best practices suggest you use a color other than the color of the agreement terms to reinforce authenticity and prevent anyone from creating fraudulent copies of the contract. Blue is the norm. Do not use a pencil because someone could tamper with it, and avoid red ink because it can be hard to read.
During the official signing of the document, each party must be of sound mind, meaning they are capable of understanding the terms of the contract and not under the influence of drugs or alcohol.
Furthermore, you should take your time to read the entire agreement before signing. Ensure you have a complete understanding of the terms and ask for clarification on anything that is unclear before putting your pen to paper.
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When Do I Sign a Contract?
The date you sign a legal document depends on your situation and needs. For instance, if you plan to leave the country next week, have your Power of Attorney signed and notarized before then.
A document usually becomes effective the day all signatories sign it. If they sign on different days, the document becomes effective on the day the last signatory signs. You cannot postdate or predate signatures on legal contracts.
Occasionally, a contract will specify a date by which it requires signatures. This is common in business agreements or real estate contracts when an offer is time sensitive.
Signing a contract can be intimidating. But signatures are necessary to make a contract valid. Considering when, where, and how to properly sign your name can ease your concerns when signing legal documents, and can ensure seamless execution of a contract.