Getting a contract signed can be one of the most complicated parts of your company’s contract management workflow. There are so many ways you can collect signatures that it’s easy to lose track of the process. That can lead to lost sales and legal problems, especially if you’ve lost a signed contract entirely.
It doesn’t need to be that way, though. You can simplify the contract signing process by choosing a signature method and sticking with it. In this article, you’ll learn the many ways you can sign a contract, the differences between wet and digital signatures, how to create an electronic signature, and the most effective ways to collect signatures on your company’s essential documents.
The many ways to sign a contract
Before choosing a signature method, you should understand your options. The following signing methods are ordered from oldest to most recent. If you’re seeking to simplify your contract signature process, options at the bottom of the list are more likely to offer you the flexibility you need.
- Pen: The original method of signing a document. Both parties sign the same hard copy of the contract. That physical item is the official contract, regardless of whether it’s scanned later.
- Pen and fax: Signing a printed copy of a document then faxing it to the other party is quicker than mailing it and allows both parties to have a physical copy. However, it requires both parties to have a fax machine.
- Pen, scan, and email: If you don’t have a fax machine, you can use more modern technology. The contemporary equivalent of faxing is scanning and emailing a document. You do just that with a signed copy of your contract.
- Digital signature pad: Moving into the electronic world, signature pads act as the original digital signatures. These pads track the movement of a special pen on their surface, allowing you to sign like a traditional signature. However, they require you to have the pad in the first place, which is costly.
- Signature image: Some signature solutions will allow you to scan your signature into the system. You can then place a picture of your signature in a digital file, causing it to appear like you signed and scanned the document.
- Electronic signature: It’s not always necessary for a signature to look like a traditional cursive scrawl. Modern technology has led to the truly electronic signature. Digital signature services let people sign files securely simply by typing their names in the appropriate field.
- Clickwrap: The most efficient solution for any signature is a clickwrap agreement. This signature is as simple as checking a box verifying “I Agree” on the document. The clickwrap provider tracks who clicked the box and when, offering a robust legal solution that doesn’t involve printing or writing anything at all.
When is a wet signature required?
Sometimes, it’s inevitable that a signature needs to be physical. These physical signatures are called “wet” because they’re produced with ink on paper. Historically, wet signatures were always required because there was no other way for people to sign anything.
Today, that’s changed. Since the passage of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) in 2000, companies and businesses in the US are not legally required to use wet signatures for any reason. They are free to use digital signatures — also known as electronic signatures or eSignatures — as substitutes so long as these signatures meet specific security standards. Of course, companies and financial institutions may still require wet signatures for their own reasons, but it’s never legally required.
The only forms that require wet signatures in the U.S. are government documents that cannot be filed electronically, such as specific tax and IRS forms. Even then, the IRS has permitted the use of digital signatures on some forms through the end of 2021.
When can you use a digital signature?
Digital signatures are flexible. You can use eSignatures on any contract as long as all parties involved in it agree to do so. That means they’re usable in various situations, including but not limited to:
- Vendor contracts
- Real estate sales
- Purchase agreements
- Service proposals
- Hiring contracts
- Lease agreements
Essentially, anywhere that a wet signature can be used, it’s possible to use an eSignature, too.
The pros of digital signatures
Digital signatures have been rapidly overtaking any kind of wet signature and for good reasons. Here are the five major benefits they offer over any physical alternative.
- Convenience. There’s no need to mail documents back and forth with a digital signature. You don’t even need to schedule future meetings. You can just send the contract when it’s finished, and the recipient can sign it at their convenience.
- Cost. With the reduced need for printing and mailing, eSignatures significantly reduce the cost of finalizing contracts. There are no ink, paper, or postage expenses, eliminating a major budget item for companies with many contracts.
- Simplicity. Digital signatures are simple. Anyone who can open an email can sign contracts electronically. With the right contract lifecycle management solution, you can collect contract signatures just as quickly as putting pen to paper.
- Speed. Since there are no shipping or scheduling delays, eSignatures are the quickest way to get a contract finalized. You can send contracts in the blink of an eye and receive a signature in return as soon as the other parties receive the notification.
- Security. Physical signatures can be forged. With the right digital signature solution, your electronic signatures can actually be more secure. The encryption required to manage an eSignature ensures that only the person to whom you sent the contract will sign it, so there’s never a risk of fraud.
How to create an electronic signature
There are many ways you can create an electronic signature. Still, they all require one fundamental element: a secure eSignature provider. For any digital signature to stand up in court, it needs to follow specific security standards to ensure that the signature can’t be forged. There are several services you can use to create trustworthy digital signatures, including:
- Adobe Sign
- Ironclad Signature
Once you’ve chosen one of these services, you can learn how to create an electronic signature field in your preferred platform.
How to add a signature in Word
How to add a signature in Word
If you want to know how to sign Word documents, you have three options. The first is to use Microsoft’s built-in signature feature.
- Click the Insert tab.
- Select “Text,” then click “Signature List” and “Microsoft Office Signature Line.”
- Follow the prompts to input your personal or business information regarding your signature, then save and exit the menu.
- Right-click in the signature box that’s now placed in the document.
- Click “Select Image” to upload an image of your signature, hand draw your signature with a touch screen, or simply type your name.
- Save the document and send it to the other party.
This is time-consuming and not as secure as a true eSignature, though. The alternative is to use a genuine signature service.
- Sign up for your preferred signing service and follow instructions to link it to your Microsoft account.
- Open the contract in Word and go under the Insert tab.
- Select Apps for Office and click “See All.”
- Search for the service you’ve chosen in the search bar.
- Select “Add,” then save the document and restart Word.
- Return to “Insert,” where you should now see an option to insert a signature field with your chosen service.
- Click “Add” and follow the prompts.
- Save and return to the other party.
A third way to insert a digital signature in Word involves using a contract lifecycle management (CLM) platform.
How to sign using a CLM
How to sign using a CLM
The most reliable method to sign documents is to use an all-in-one CLM with a signature service. Ironclad, for example, offers Ironclad Sign, a fully configured signing service within the CLM. To sign a document in Ironclad:
- Open the contract.
- Click on the signature field and choose whether to type, write with a touch screen, or insert an image.
- Save the document.
The CLM will automatically notify the other parties involved in the contract that it has been signed. There’s no need for version control or manually sending files anywhere. The right CLM will even offer integrations with any electronic signature providers you already use.
How to sign a PDF
How to sign a PDF document
PDF documents can be signed with Adobe or through a CLM service. To sign with Adobe Sign:
- Download Adobe Reader if you do not already have it and open the PDF in the program.
- Click “Sign” at the top of the page.
- Click the signature field and choose whether you want to type or insert an image.
- Save the document.
- Return to the other party.
This makes use of Adobe’s signing software, but you will still need to handle version control and returning the new file to the other party.
Using clickwraps to sign low- and no-negotiation contracts
Some contracts can be signed with even less work. You can use a clickwrap solution to add simple checkbox signatures to your contracts. These signatures are just as secure as any other eSignature, but without the hassle of typing or writing a name. For contracts that don’t require significant negotiation, clickwraps are the safest and most straightforward method of getting the signatures you need.
Make your digital signature Ironclad
If you’re ready to begin using secure, reliable digital signatures in your contracts, Ironclad can help. Reach out today to learn how using Ironclad’s contract lifecycle management platform can improve your workflow and help you collect more signatures. Whether you want clickwrap signatures or in-depth eSignatures, Ironclad offers the signature solutions you need.
Ironclad is not a law firm, and this post does not constitute or contain legal advice. To evaluate the accuracy, sufficiency, or reliability of the ideas and guidance reflected here, or the applicability of these materials to your business, you should consult with a licensed attorney. Use of and access to any of the resources contained within Ironclad’s site do not create an attorney-client relationship between the user and Ironclad.
- The many ways to sign a contract
- The pros of digital signatures
- How to create an electronic signature
- How to add a signature in Word
- How to sign using a CLM
- How to sign a PDF
- Using clickwraps to sign low- and no-negotiation contracts
- Make your digital signature Ironclad
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