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Signing a contract means that the parties agree to the terms and conditions contained therein and their contractual obligations.

What is meant by “signing”?

Signing is adding a handwritten or electronic signature to a contract to prove the identity of the sender. Electronic signing of contracts eliminates the need for physical paper documents and greatly speeds up the process.

Signing contracts is often a critical part of any contract and plays an important role in contract management software and proposal software. It streamlines the contract process with several features that simplify contract creation, shorten workflows, and remind parties to submit signed contracts.

Overview of electronic signing types

Businesses use various forms of digital signing to complete the different types of contracts and documents. It is important to understand both the software that allows users to sign contracts and the various standards that have been established. Basically, two types of electronic signatures exist:

  • E-signatures: e-signatures are the most common way to sign a contract electronically, which is achieved through the use of e-signature software. It is a digital form of signature that is legally binding and secure, but does not include any encoding or standards. For example, an e-signature can include a photocopy of a handwritten signature or just clicking an “accept” button.

  • Digital Signatures: Digital signatures are another common form of signing contracts, but unlike electronic signatures, digital signatures are generally more secure. With a digital signature, the user must have a digital certificate to be associated with the contract. A digital signature is often authorized by certificate authorities, which are responsible for issuing digital certificates. A digital certificate is used to validate the contract to determine its authenticity. This is important to verify the identity of the person who signed it.

Standards for electronic signing

In addition to the type of electronic signature, there are also different standards for signing contracts in terms of security and validity. These standards are as follows

  • Standard Electronic Signatures (SES): standard electronic signatures do not require verification of user identity. They are the simplest type of signature. For SES, a scanned signature or the click of a button such as “I accept” is usually sufficient.

  • Advanced Electronic Signatures (AES): AES is used for legally valid electronic signatures. These signatures are uniquely linked to the signer, can identify the signer, and can detect changes to the signed data. This type of contract signing is often completed with two-step verification, which is a second level of verification. An example of this is an application on your cell phone that allows a signer to confirm that they actually signed an electronic contract themselves.

  • Qualified electronic signatures (QES): QES provide the highest security and legality requirements of any digital signature. Qualified signatures provide additional security through a third-party trust service provider (TSP). These may be required for documents that require a very high level of security. This type of signing is used least often, as most contracts can be adequately signed using SES or AES.

Standard clauses when signing a contract

Signed contracts refer to a wide range of written agreements. When both parties sign the contract, they accept certain provisions that include duties and obligations. These provisions vary depending on the type of business, the industry, the scope, and the parties involved. However, these following provisions are usually found in a signed contract:

  • Arbitration Clause: When you sign a contract with an arbitration clause, you agree to settle disputes out of court and through arbitration instead.
  • Choice of Law Clause: When you sign contracts with choice of law clauses, you specify which jurisdiction has jurisdiction over disputes. By signing, you agree to the choice of jurisdiction.
  • Confidentiality Clause: The effect of signing a confidentiality clause is that you will not disclose proprietary information or trade secrets about the other party.
  • Definition Clause: The definition clause outlines the meaning of certain terms. By signing, you acknowledge that you agree with the definitions and know what they mean.
  • Indemnification Clause: By signing a hold harmless clause, you agree to hold the other party harmless for third party lawsuits.
  • Severability Clause: By accepting a severability clause, you agree that if one or more provisions are unenforceable, the signed contract will remain untouched.


When signing a contract, there are some important things to keep in mind. When you sign a contract, you are agreeing to the terms and conditions contained therein, and of course, which part of the bargain you are honoring. Therefore, it is essential that you are aware of the consequences and that you know what they mean.

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