Legal contracts also referred to as signing contracts, are legally binding documents. While some contracts may require a signature in person, many legal contracts today can be done with an online signature. As such, it is important to know what to look for and what your responsibilities are when it comes to signing them.
There are many pages that can help you make legal forms online that you might need. By learning the following information, you will be better equipped to deal with any legal contract that might come your way.
What Is a Legal Contract?
A legal contract is a mutual agreement made between two or more parties. They generally become relevant only after discussion between the parties and potentially after negotiations depending on the type of contract. The most common form of legal contract which everyone comes across at some point is an employment contract.
Legal contracts stipulate the obligations and requirements that each party must uphold, as enforced by the law. These contracts are made by private parties, and generally detail the exchange of something of value from each party, such as goods, services, time, or money.
Always be aware of what a legal contract is before you sign a potentially legally-binding document.
Types of Legal Contracts
Before signing a legal contract, you should be fully aware of what category said contract falls under. Here are some examples of the most common legal contracts, what they entail, and why they are important.
Employment Contracts
Employment contracts detail the agreement between the employer and the employee to exchange time spent working for pay and benefits. They detail wages, holiday time, expected hours and responsibilities.
When signing an employment contract, you should ensure that the terms do not infringe upon your legal rights and that it cannot be used to exploit you later. Employment contracts keep both parties protected, and act as a legal basis should either party take legal action against the other.
Sales Contracts
For large financial transactions, sales contracts are utilized to dictate the terms of sale between the seller and the buyer. The purchase of a vehicle, a property, land, or anything else of substantial value may benefit from a sales contract.
These contracts act as proof of possession should ownership ever be disputed. They also detail specific arrangements such as paying in installments, the expected date for the full or partial amount to be paid, and when the buyer comes into full possession of the purchased item.
Service Contracts
Similar to sales contracts, service contracts detail the exchange of money for services. Many service contracts, especially between companies, may span a number of years, making them multi-year contracts.
This is a vital legal document to ensure that all agreed-upon services are carried out and that all payments are made in full. If the contract’s time period covers more than one year, it is advised that a clause exists allowing either party to re-evaluate the contract each year.
Lease Agreements
Lease agreements dictate the terms of renting a property temporarily between a landlord and an individual or, in the case of a commercial lease agreement, a company. While the terms of your lease agreement may be different depending on whether it is residential or commercial, the fundamentals of the contract are likely to remain the same.
Lease agreements protect those leasing with regards to potential rent increases, security deposits, and the length of the lease. They simultaneously protect landlords with stipulations of what can and cannot be done on the property, such as smoking, subletting, redecorating, etc.
What Makes a Contract Legally Binding?
There are four vital factors necessary to determine whether or not a contract is legally binding. These are:
- Mutual Assent. The agreement between all parties to the contract terms, shown by signatures, generally features an offer and an acceptance.
- Adequate Consideration. The mutual exchange must be deemed fair, and the promises each parties provide to be of equal value.
- Capacity. Capacity refers to the ability to understand the contract and its ramifications, which is necessary from all parties in order to make a contract legally binding.
- Legality. The contract must adhere to the law of any country in which it is enforced in order to be a legal contract.
If any of these four factors are not upheld, a legal contract is not considered to be legally binding. For more information, see this article on contract law to ensure you always remain legally protected.
Signatures
It is vital to be aware of the local legal standard of signatures before signing any legal contract. If your signature is found to contain errors or does not meet the standard, it may be deemed invalid and affect your contractual rights.
Research everything you need to know about false signatures.