What is an Online Contract?

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There has been a paradigm shift in contract signing. Online contract signing, an innovative way to streamline and expedite the agreement process, has gained substantial traction in recent years.

What is an Online Contract?

An online contract, often interchangeably known as a digital contract or e-contract, is a legally binding agreement formed electronically between two or more parties. Unlike traditional paper contracts, these are created, shared, and signed digitally, utilizing electronic signatures.

An online contract transcends the traditional pen-and-paper method, harnessing the power of digital technology to facilitate the entire contract lifecycle. From negotiation and drafting to signing and storage, every stage of the contractual process is digitized for enhanced efficiency and accessibility.

Why Do You Need a Contract?

Contracts serve as the backbone of business relationships, formalizing commitments and expectations. The shift to online contracts offers several advantages:

  • Efficiency: Online contracts expedite the signing process, reducing the need for physical presence and snail-mail exchanges.
  • Accessibility: With digital contracts, parties can access and review agreements from any location, enhancing convenience.
  • Cost Savings: Eliminate printing, postage, and storage costs.
  • Environmental Impact: Going digital reduces paper waste, aligning with eco-conscious practices.

How to Send an Online Contract for Signing?

The process of sending a contract for electronic signing is simple enough.

  1. Choose a Reliable Platform: Select a reputable online contract signing platform that offers secure and user-friendly features.
  2. Upload the Contract: Upload the contract document onto the platform. Ensure it's in a format compatible with the platform's requirements.
  3. Add Signatories: Specify the parties involved and their roles. Assign signature fields; you can set the signing order if needed.
  4. Incorporate Signature Fields: Place the signature, date, and other relevant inputs in appropriate places.
  5. Email Notifications: Configure periodic reminders to help signers keep track of any documents and prompt signatories to review and sign the contract.
  6. Electronic Signatures: Signatories can add their electronic signatures using a mouse, touchscreen, or stylus.
  7. Completion and Storage: Once all parties sign, a final, signed copy is generated.

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More Contract-Signing Features for Your Business

In addition to the basic process outlined above, a few advanced online contract-signing platforms offer a range of features tailored to enhance business efficiency:

  • Templates: Create reusable contract templates, saving time when drafting similar agreements.
  • Workflow Automation: Set up automated workflows for sequential signing, reminders, and follow-ups.
  • Integration: Integrate with other business tools like CRM systems for seamless information flow.
  • Multi-Language Support: Cater to a diverse clientele with contracts available in multiple languages.
  • Audit Trail: Maintain a comprehensive record of all activities related to the contract, bolstering transparency and accountability.

Elements of a Viable Contract

For an online contract to hold, it must encompass crucial elements:

  • Offer and Acceptance: Clearly state the terms offered and ensure all parties understand and agree to them.
  • Consideration: Detail the value exchanged between parties, which could be monetary or non-monetary.
  • Legal Intent: The contract's purpose must be legal and not violate any laws or regulations.
  • Capacity: All parties involved must have the legal capacity to enter a contract.
  • Mutual Consent: All parties should willingly and knowingly consent to the terms without coercion.
  • Performance Obligations: Outline the actions or deliverables expected from each party.
  • Timeframe and Termination: Specify the contract duration and conditions under which it can be terminated.
  • Dispute Resolution: Include a mechanism to resolve disputes, which can mitigate potential conflicts.

How to Sign a Contract Online?

Signing online contracts is a straightforward process for signatories:

  1. Review: Thoroughly read the contract terms, understanding the obligations and implications.
  2. Access the Link: Access the online contract signing link provided via email or the platform.
  3. Electronic Signature: Follow the prompts to add your electronic signature. Some platforms may require additional authentication steps.
  4. Confirmation: After signing, you'll receive a confirmation email with a copy of the signed contract for your records.

Are Contracts Signed Online Legally Binding?

Yes, contracts signed online are legally binding in most jurisdictions, provided they meet the requirements of a valid contract. Key factors contributing to their legality include:

  • Intent: Both parties must demonstrate a genuine intention to enter into a legal agreement.
  • Consent: All parties must willingly and knowingly agree to the terms without any form of duress or misrepresentation.
  • Offer and Acceptance: There must be a clear offer presented by one party and accepted by the other.
  • Consideration: Something of value must be exchanged between parties, whether it's money, services, goods, or promises.
  • Legal Capacity: All parties involved must have the legal capacity to enter a contract.

Is a Digital Contract the Same as an Online Contract?

The terms "digital contract" and "online contract" are often used interchangeably, but there is a subtle distinction between the two. A digital contract refers to a contract in a digital format, such as a contract document saved as a PDF. 

On the other hand, an online contract specifically implies a contract that is not only in a digital format but is also created, shared, signed, and stored online through dedicated platforms.


Q: Can any type of contract be signed online?

While many types of contracts can be signed online, some categories, such as wills and certain real estate agreements, might require specific formalities that only a few advanced online signing platforms can accommodate.

Q: Is a handwritten signature necessary for an online contract to be valid?

No, a handwritten signature isn't mandatory. Electronic signatures, which can be a typed name, a scanned image of a signature, or a digital signature, are legally recognized in many jurisdictions.

Q: How do I know if an online contract signing platform is secure?

Look for platforms that adhere to industry-standard security measures, such as encryption, multi-factor authentication, and compliance with data protection regulations like GDPR.