A legal signature refers to the signatory's name written in a distinct form that's used to identify themselves or provide authorization on important business documents.
The way people do business traditionally has changed. Wet signatures are being used less. Nowadays, people are turning to paperless digital formats to streamline operations, the criteria around what constitutes a legal signature have shifted. But if you're not sure what kind of signature to use, you can also read our guide about what is a wet signature.
If you've ever signed anything before, then you've likely used a legal signature. When it comes to determining what exactly is a legal signature, things can get complicated.
In this article, we'll examine this question and many more to help you to fully understand what it means for a signature to be legal and how you can ensure that what you sign is legally binding—even when it's not in writing.
Ready? Let's jump right in.
Essentially, a signature refers to a mark an individual makes on a document (or another instrument) to acknowledge that they agree to or accept conditions that are outlined by what they're signing.
As business gets more global every day, the rise of digital signatures has changed the way people do business and sign contracts. The process of printing, signing, and scanning business documents is too time-consuming for the way we do business in a modern world. Digital signatures offer a much more streamlined solution that saves both time and money.
An electronic signature, also known as an e-signature or typed signature, is created when someone types their name on a document or pastes a scanned image of their handwritten signature. As we move further into a digital world where the concept of a handwritten signature is somewhat outdated, the scope of what constitutes a legal signature has shifted significantly.
Particularly for freelancers, electronic signatures simplify the whole process of signing important business documents like contracts, quotes, proposals, retainer agreements, and other types of forms.
Regardless of the form it takes, it's important that a signature is used as proof that information has been considered and accepted by the signer. That means a signature can be stylized to a point that it's completely illegible to others, but still be legal.
For a freelance agreement to be legally binding, it must be signed by all parties involved. This is the most common way for individuals to indicate that they have carefully read and agreed to the terms outlined in a contract or other type of document. Regardless of what the signature looks like—whether it's written neatly, scribbled, or typed—it's proof that conditions have been considered and accepted.
As long as a signature is representative of who a person is and their intent, any kind of mark is considered legal.
No, they don't. As we mentioned before, a signature refers to any mark made by someone upon a document to express their consent from the conditions outlined. Therefore, a signature doesn't have to be someone's full name. Instead, it can be an illegible mark, a squiggle, or a scanned picture of a signature if signing electronically.
They sure are. Legal signatures can be simply an individual's initials. The important thing to remember is that your signature should match what you have signed other legal documents with.
For example, if your signature on your driver's license is simply "LM" rather than your full name, it should be the same on any other document you've signed.
This will help you to avoid running into any problems with your bank or other legal institutes that have your signature on record.
The legality of signatures encompasses a range of marks and actions that indicate someone's identity and intent. In the United States, the legal rule follows that unless a document specifically states a certain signature method is required, it can be made in several ways. That means a digital document or another type of file can be signed using handwritten or typed signatures, as long as it's clear that the signer has consented to signing.
At this point, you might be wondering what exactly is an electronic signature.
According to the ESIGN Act, an electronic signature is:
“An electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.”
It's a legally valid method to attain or provide consent on any electronic document. On a fundamental level, an e-signature does the exact same things like a handwritten one in the eyes of the law.
For example, when signing a contract online, a typed signature would represent exactly what it would on a printed contract—that the signer understands and agrees to the terms identified in the contract.
Using typed signatures when signing an important business document yields several benefits.
First of all, it significantly speeds up the process of sending documents back and forth and makes things much simpler. It prevents contract delays from occurring and streamlines the process of coordinating signatures. This means you can get the administrative tasks out of the way quickly, so both parties can both get on with more important tasks.
Electronic signatures also result in less money being spent on paper, document shipping, and materials, as well as other administrative costs.
That's not all though. One of the biggest benefits of signing electronically is that it offers greater location flexibility as those involved can access, edit, and sign forms anytime, anywhere. As a freelancer, this means you and your client can come to an agreement as soon as possible.
Now you know all about typed signatures, you might be wondering how to sign a contract online?
There are a few different ways to sign with an electronic signature. You can do it with a mouse-click by ticking a box, or by drawing one using a mouse. You might also upload a picture of your handwritten signature and or simply sign a document with a typed name.
Yes, electronically typed signatures are legally valid as long as intent and consent are involved.
Electronic signatures are legally valid as they essentially perform the same function as a handwritten signature on a piece of paper.
In this way, they carry the same weight as pen-to-paper signatures and can replace them as long as they are legally binding in the country of issue. They must also meet three key conditions to be considered legally valid. Those conditions are:
The ESIGN Act is a United States federal law that ensures the legal validity of electronic records and signatures on important documents. Therefore, e-signatures have carried the same legal weight as handwritten signatures since the ESIGN Act was passed in the United States in the year 2000.
As a freelancer, you're probably wondering how to get started with e-signatures. Tools like Bonsai's online signature maker allows you to type or draw your name to create a legal signature that you can use on important contracts, proposals, and other docs.
If you're a freelancer, you'll benefit from using Bonsai to create a signature in a few minutes and use it to legally mark, consent, and approve a contract and any other agreement with clients. Anything signed with Bonsai's signature tool is legally valid and will hold up in the face of the law.
Bonsai offers a free trial that allows users to create, edit, and esign as many freelance contracts as you like. We've also created a guide on how to digitally sign a PDF to help freelancers who are new to the gig economy.
That's not all that Bonsai offers though. Bonsai is a free unified platform for freelancers that integrates and automates each stage of running a business.
With Bonsai, you can create and customize contracts using one of our free contract templates for any type of freelancer. Choose your template, fill in the project details, and integrate it with your invoices.
Once you're done, you can add your electronically typed signature and send it off to be signed by your client. Download the file as a PDF, attached it to an email, and send it directly to your client. What's more, you can track the whole process from the all-in-one Bonsai app.
That means you can spend less time worrying about administrative tasks, and more time doing what you do best. Start free with Bonsai today and start legally signing important business docs to streamline how you run your freelance business.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?