Startup guide: Signing Agreements/Contracts 2 years ago

An agreement between two or more parties to do (or not do) something in exchange for something of value is essentially what makes up a contract, especially in business, where contracts are important to complete transactions and make something legally binding.

Is signing a contract necessary? 

Contrary to popular belief, a contract does not need to be in writing to be enforceable or valid. One must make an offer, and the other shall accept it unless the law clearly states that an agreement must be in writing; then, a signature will be necessary to validate the said agreement. 

Unsigned agreements may still be legal, but those can be compromised. But the easiest and most practical course of action is to draft a good contract, get legal assistance, and make sure both parties sign a contract before starting to work or releasing the money.

Who can sign a contract?

A contract may be signed by anyone involved–who is of legal age and mental capacity. A contract can only be legally enforceable if all parties have the capacity to enter one. In other words, those who are considered to be incompetent to engage into a contract have the right to "void," or set aside, the contract. For a corporation, it should be an authorized representative, which is evidenced by a Secretary Certificate signed by the corporate secretary.

If a contract involves conjugal property, both the husband and wife should sign. 

What is power of attorney?

A Special Power of Attorney, or "SPA," is a legal document that gives someone else the power to act on your behalf. The required paperwork must be notarized or signed before a notary public.

Can Minors sign a Contract?

A contract entered by a minor is voidable and annullable–they have the right to cancel any agreement made. This protects minors who might not understand the implications of some transactions, giving them the option to terminate the contract at their own discretion. Whereas the minor has sole discretion over this right and does not belong to the other contracting party. The minor can, therefore, do what they please with the contract while it is still in effect. It is common that parents or guardians often sign for their children or wards.

Are Electronic Signatures legally binding?

The Electronic Commerce Act of 2000 legally recognizes electronic or digital signatures. It is defined as "any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to." At the same time, electronic documents are provided the same legal protection as paper-based documents.

You may check Twala which digitally transforms businesses with a legally binding and secured electronic signature that is powered by blockchain smart contracts–Digest clients may also receive discounts.
Note that electronically signed documents cannot be notarized but not all contracts have to be notarized. 

Contracts ensure that both parties are receiving the best possible terms. Contracts are legally binding agreements that detail how the parties will exchange services for money.

Should you need to draft a contract, you can consult with a legal expert or head on to Digest.ph and find the contract you need.