Creating, managing, following, and monitoring the contracts is one of the most sensitive tasks that a business performs. The process can become even more challenging and risky when you need legal attention but do not have legal assistance. Normally, businessmen draft these documents by themselves or search sample contracts online and change accordingly. However, it does not mean that they can be successful in this way, as if there is a legal issue, they may face the circumstances.
According to the legal experts, there are five basic legal requirements that you need to fulfill for making the contract legal. We will discuss these requirements later, but before that, we will explain electronically signed contracts, or in simple words, E-signature.
The most important aspect of this discussion is that if there must be one legal aspect of any business, it must be a contract. This statement tells us the value of e-contracts. Due to the complexities that are involved in e-contracts, the businesses use standard contracts. However, a smart businessman should never compromise on it, as the legal experts advise to review all contracts and try to make it a legal contract. More importantly, small businesses need to focus more on e-contracts because if there will be any legal issue, it will become more difficult to handle financially.
What is an Electronically Signed Contract?
When you process, sign, and submit the contract online, we can say that it is an electronically signed contract. Online contracts are quite common in businesses because they prefer online business more. By using e-contracts, the businesses need to incorporate all suppliers, customers, and partners for signing the documents digitally. Moreover, they use ATMs and credit cards as well, which are also a type of electronically signed contracts.
Now, let us look into the five requirements, which are necessary to fulfill to meet the latest regulations and laws that governments have imposed.
The Legal Requirements to develop a legal e-contract
Here are the requirements:
- Authenticity means to identify all the parties that are involved in the contract.
- Define the contract subject that will tell the purpose of the contract.
- Incorporation of non-repudiation that assures the signers that no one will be able to change the contract when the contracted parties have signed.
- The contract must have a valid signature with the date of activation to make it legally-binding.
- The contract must be confidential if all the parties want it.
The most important thing is mutual consent and a clear offer. Sometimes, you send an email with all the details of the contract. In this email, you define the offer and acceptance criteria clearly to convert it into a binding contract. It means that you can state the contract through email communication, presented offers, and messages, and both the supplier and client can confirm all the statements.
However, in some cases, some contracts do not have such a clear picture, but even then, it can also be considered for legal claims.
Another critical issue related to electronic contracts while comparing with traditional contracts is the signing process. While signing traditionally, the signer is in front of you that confirms the identity of that particular person. On the other hand, anyone can become the signer without prior notice while signing online. Therefore, the legal regulations say that only that person is binding by law, who has signed the document.
To make sure that electronic signatures are applicable, there is a need to have proven intent, and it can be possible only if the authorized person is signing the contract. It is also important to provide evidence that can have different options. For example, advanced electronic signature solutions implement some criteria, based on biometric identification, time stamping, and data trial, which give the authentication to the document. General contract laws have defined all these situations that you need to implement for electronically signed contracts.
Conclusion
Small businesses need to be careful while using electronic contracts. They should avoid giving quotes o committing something on email. If they will not do so, they can become a part of the contract. Therefore, you should have a lawyer, who will guide you about electronic communication and electronically signed contracts to deal with these documents more attentively and carefully.