Starting A Small Business? Learn The Basics Of Digital Contracts

Whether you intend to grow your small business or always keep it at home, it's a good idea to learn the basics of digital contracts. Your business can use these contracts for both mobile devices and desktop computers. Read on to learn the basics of digital contracts and why they'll benefit your business.

Familiarize Yourself with E-Contract Law

Because information is passed so easily within the electronic realm, some people may think that contracts are more lax when conducted this way. However, there are still many nuances to digital contracts. The U.S.'s Electronic Signatures in Global and National Commerce (ESIGN) Act has five major components that you should understand. In order for a customer's electronic signature to be legal, you need to have:

1. Intention: Obviously if a customer agrees to a service or other terms, then both parties need to sign the contract. If the customer declines an electronic signature, then the transaction cannot take place.

2. Attribution: Not only does a customer need to sign a document, but he or she must be able to receive a copy of the electronic signature (often through email ID). If you are using a mobile device, it should contain a signature time stamp. This kind of information is necessary for legal evidence in case of an audit.

3. Consent: For certain business documentation, you may be required to provide your customers with consumer consent disclosures. Since some electronic forms are often processed by mobile apps, other third-party services, and/or cloud-based software, so your customers should be assured that their data is safe. Plus, these consent disclosures will give your customers information on how to access paper copies, how to withdraw consent, and what the consequences of withdrawing from a transaction are.

4. Retentive Ability: You should be able to store your electronic forms and signatures for future reference. This isn't only vital for your business dealings but for possible legal proceedings.

5. Association: If you need to obtain an electronic signature, that space to sign must be associated or linked to the document that the signature applies to. Your customers should be sure that their signature will not be transmitted to someone else or to another e-document. An associated record will reflect this process by generated a textual statement about how the signature was created and what it applies to.

Know the Benefits of Digital Agreements

Although compiling digital contracts and signatures may seem daunting at first, there are some distinct advantages to these transaction methods. On average, an office can waste about 350 pounds of paper—per person—every year. Companies, like Bank of America, have been able to save millions of dollars by just changing to digital forms.

Besides reducing waste, you'll save costs on storage. Many apps allow you to not only to sign a document with the touch of a finger but to save said document to your email or to a cloud service. If you don't have a lot of storage area in your home, this digital storage is invaluable.

Digital agreements can cut down the time you spend on compiling documents, since many apps provide commonly used templates—like nondisclosure agreements, bills of sale, etc. Many of these apps are free or available at a low cost, which is important since many small businesses don't have a lot of wiggle room starting out when it comes to their budget. Lastly, while finding an app that provides a mobile-ready digital contract service is important, don't forget to look at other useful features. Some apps and online services provide:

  • Document encryption and authentication

  • Audit trails

  • E-mail reminders for signatures

  • Distribution of documents to multiple

  • Signature lines for tips (useful for service industry businesses, like massage therapy)

For more information on digital forms, signatures, or mobile-ready digital contract creation, contact an online marketing service in your area today.