In the vast realm of contract law, you'll often hear phrases like "intend to enter," "verbal contract," and "put it in writing." These reflect the nuanced stages of contract creation, fulfillment, and enforcement. In today's fast-paced world, these traditional methods are quickly being replaced by more modern, efficient processes. At the forefront of this evolution is contract management software that employs the power of electronic signatures.
The Importance of a Written Contract
A contract - verbal or written - is an agreement between two or more parties who intend to enter into a legally binding relationship. But while a verbal contract may technically be valid, it's always advised to put it in writing. A written contract not only eliminates any ambiguity, but it also serves as concrete evidence of the agreement's terms.
Elements of a Written Contract
The elements of a contract are simple:
- Offer
- Acceptance
- Acknowledgement of Obligations & Mutuality
- Consideration
- Legal Capacity of Parties
- Legality
To translate this into practical terms, think of it like this: party A makes an offer to party B, who accepts it. Both parties sign the agreement - demonstrating their mutual intent to enter into a binding relationship. In return, there's an exchange of value, or consideration. Additionally, there is an understanding that the parties are able to enter into the contract – and that the contract is legal.
Yet, the signing process can often become a bottleneck - especially when the parties involved are dispersed geographically or simply too busy to meet. This is where the role of contract management software and electronic signatures becomes increasingly significant.
The Role of Electronic Signatures Within Contract Software
With contract management software, parties can sign an agreement digitally. This doesn't just mean adding a scanned image of a hand-written signature. Rather, it's a sophisticated process that involves encryption and tracking - offering a high level of security and trustworthiness (especially with a CLM software provider that boasts digital signatures).
What's even better is that the software is at your corner for the holistic CLM process - starting from the creation of the contract to its execution and post-execution. It streamlines the process by helping in drafting the agreement, adding clauses from a configured and approved clause library, streamlining review with numbered version tracking, and finally getting it signed with intelligent contract workflows and approvals routing. It virtually ensures that the person who signs the agreement has the authority to sign it - making the entire process seamless and fast.
Electronic signatures are legally binding - much like traditional signatures. They represent a person's intent to agree to the terms of the contract. As long as both parties sign the contract and the contract contains all necessary elements, it's as valid as its paper counterpart – but with added convenience and security.
Centralized & Optimized – Even After Singing a Contract
After the contract is signed, the software stores a copy of the agreement in a secure and easily searchable contract repository - accessible to parties involved and those configured on a permissions-based sentiment. This means you'll have a copy of the contract at your fingertips - eliminating the need for physical storage space and the risk of misplacing or damaging the paper document.
Remember, a contract is more than just a signed document. It's a promise, a pact, a mutual understanding. It's crucial to ensure that your contracts are drafted carefully, signed properly, and stored securely. With contract management software and electronic signatures, you can easily streamline this process - saving time, reducing costs, and minimizing potential disputes.
The Takeaway
In conclusion, whether you're a small business owner, a freelancer, or a multinational corporation, contract management software offers a robust solution for managing contracts in the digital age. The modern signing process - endowed with electronic signatures - is efficient, secure, and legally binding. It ensures that your business agreements are solid and your peace of mind intact. So, the next time you intend to enter into a contract, remember: put it in writing, use a contract management software, and sign it electronically.
To get started with a transformed way of signing a contract, book a free demo today!*
*Legal Disclaimer: This article is not legal advice. The content of this article is for educational purposes only. The information on this website may not present the most up-to-date legal information. Readers should contact their attorney for legal advice regarding any particular legal matter.
