• Issues about contract execution process

I have following doubts related to contract negotiation and execution process in business. Let's say A hires a freelancer B online for web design and wants to sign contract. A is from India and B is from USA and both communicate only by email. In above case following are the queries:

1) Contract signing process
- Which party should initiate the contract signing process?
- Should A directly send contract for signature to B by email?
- What if A sends contract to B then B sends his own contract to A for signature?
- Should A first send a draft copy for review and then send final copy?
- Should A sign the contract before sending to B or send blank contract to be signed first by B?
- What if A sends signed contract but B than refuse to sign or decides not to work?
- Is it necessary for A to send scan copy of final contract having signature of both A & B?
- What A should do if B sends signed contract but altering/deleting few clauses?

2) Contract date
- Where should you put execution date in the contract?
- If you put in beginning of contract (5th July), A sends to B by email and B sends back signing on (6th July). After that A signs that on (7th July). What will be contract execution date?
- Should you also put date of signature while signing contract?

3) Personal detail verification 
- How can you verify other party details in online medium?
- How A will know B's name and address for inserting in contract?
- How A can verify if B gives wrong information about name. address or signs fake signature? 
- How A can ensure B is authorized to sign contract in case that is an organisation?

4) Witness required
- Is witness necessary while signing contract by any party? 
- Which type of contracts require witness?
- How many witness and from which party is required?
- Who can be witness for any party in a contract?

5) Contract signature
- Is pasting scan copy of signature in contract document valid?
- Should you ask for scan copy of original contract after signing the print out of contract?

6) Court paper
- When should you ask printing contract in court paper and why?
- If two parties are from separate country then which country court paper sill be used?
- If two parties are from India then who should do printing in court paper?

7) Printing issues
- Do contracts are printed in plain paper or letter head of any party?
- If letter head then which party's letter head should be used?

8) Contract record 
- Should you only keep final print out of contract signed by both parties?
- What other contract documents need to be maintained for record purpose?

Looking forward your reply.
Thank you.
Asked 2 years ago in Business Law from Kolkata, West Bengal
There is no rule as to who should send the contract. any one party can make a offer. if that offer is agreed upon then it becomes an agreement if there is intent to make such agreement legally enforceable then it becomes a contract enforceable by law. 

if however the initial offer is not completely satisfactory then the other side might send in some modified offer which is called the counter offer and the same procedure follows.

There is no hard and fast rule about the location of the date but normally such a date is mentioned at the beginning.  Verbal agreements without dates can also be enforceable contracts as long as there is evidence to show that such verbal agreement was achieved between parties. But it is advisable to get everything in writing.

There is no procedure of verifying such address and all but as long as one can prove that the party agreed to contract with such contract is enforceable in law unless it is void by other laws. for example one cannot contract with another to do something patently illegal like gambling or theft etc etc. it must be a legal objective.

certain conveyance deeds require witnesses but not all contracts.

scan copy or xerox copy does not matter as long as the signature is genuine and reflects either offer or acceptance.

one does not need to contract on court paper but certain contracts require stamp papers and registration charges and even notarization.

as long as the intent to contract can be proved the paper involved does not matter. but people use stamp papers and legal papers to imply thats it was done with the intent of it to be enforceable by a competent court of law,

always keep two original copies for yourselves. get prints or copies for the rest of the work.
Saptarshi Banerjee
Advocate, Kolkata
220 Answers
4 Consultations

4.9 on 5.0

1) draft copy should be sent by A to B for his approval in case B wants any changes the same can be incorporated in the contract 

2) in case B sends signed contract by deleting some clauses it is upto A to accept or reject these changes 

3)date when contract is signed by both parties would be date of contract . after the signature date of signing can be mentioned by the parties 

4) insist on identity proof documents like passport for verification of personal details 

5) if B is working in an  organisation A can insist on board  resolution authorising B to sign on behalf  of the organisation 

6) witness  is  not required for signing the contract 

7) after signing print out copy of contract keep copy of said document for your record 

8) it is not necessary contract should be executed on court paper . franking can be done  for payment of stamp duty if required . 

9 ) contract can be executed on plain paper or letter head of either of the parties 

10) keep final print out of contract signed by both parties for your record 
Ajay Sethi
Advocate, Mumbai
29584 Answers
1609 Consultations

5.0 on 5.0

1. A contract brings into inception mutual rights and duties. There is no legal bar to initiation of contract drafting by either party. You have to be flexible. Either A or B can send the contract to the other through email for signature as in any event unless both the parties sign the contract it cannot come into existence.

2. The due diligence has to be carried out by A through his known sources. If B claims to be the authorized representative of the organization then A should ask him to show the letter of authority or board resolution, as the case may be.

3. No witness is required to execute the contract.

4. A digital signature will also suffice. However, a scan of the signature will not.

5. There is nothing such as court paper. It can be drafted even on a plain paper.

6. The final contract, as signed by both the parties, should be retained for the record of rights and liabilities.
Ashish Davessar
Advocate, Jaipur
20072 Answers
529 Consultations

5.0 on 5.0

1. Contracts which are enforceable in the court of law termed as valid contract. There are several ingredients such as consensus ad idem, free consent, lawful object, fulfillment of legal formalities, legal obligations, capacity of parties, etc. in a contract to make that contract a valid contract. Series of email transactions constituted an unambiguous agreement on all terms. In each and every contract there is an offer from either of the party and that if accepted by the receiving party as it is, that becomes a contract, but if the receiving party on getting an offer make certain amendments/changes in the terms of condition and  return it back to the first party it automatically becomes a offer now and the first party if accepted, then it becomes the contract. As asked by you in this part of question it is advised that the a plan to "memorialize" an agreement in a contract between 'A' and 'B' is simply a recitation of what has already been agreed to by them.
2. While making a contract through email, the execution date of contract would be an effective date mentioned in the contract, which can be any future date. In the absence of such provisions in the contract, the contract would be effective on the date it is signed by the person to whom it has been given for signatures. If this person has not dated his signatures, the contract would be effective from the moment it leaves the hands of that person. 
3. It is advised to go through Digital Signatures of both the parties and that would definitely minimize the identity crisis.
4. Witnesses are definitely an important legal aspect in signing any form of legal document. But in the present context it is a contract to be executed through electronic signatures and hence the witnesses are not required.
5. A scan copy of signature is not advisable. Yes, you can keep the printout of the contract and scanned page containing signatures received through email.
6. There are various types of contracts which don't require even a written contract at times. Hence, it is advisable to for a contract under the seal of the company/firm.
7. Printing on plain paper would suffice the purpose.
8. Yes, should keep final print out of contract signed by both the parties. Keep print outs of emails transpired between both the parties.
Rajinder Kumar
Advocate, New Delhi
68 Answers
4 Consultations

5.0 on 5.0

1) A draft contract should be made and get the contents corrected and a mutually agreed contract so drafted to be made final and the terms of signing them can be discussed. 
2) The date of execution of contract can be different t that signing the contract, here is no legal infirmity in it. 
3) The verification aspect of each other should be done through own and reliable sources only, there is no legal procedure for such verification.  You must know from which source did the other party approach you and who vouched for him whether the vouched party is reliable, whether the other party has good credentials through other business, whether he furnished other details which were found to be genuine on verification, whether he agrees to indemnify the loss as per the prevailing law of this land or any other law, and many more
 such parameters through which you can confirm the genuineness of the other side. 
4)  The reliability of a witness to the other side can also be under cloud, hence he may get it attested through a Notary Public of that country to confirm the genuineness of that witness. 
5) These days digital signatures are more reliable, you can always demand for scanned copies of the contract once it is executed. 
6) What do you mean by court paper?, There is no such thing called as court paper in which such contracts need to be type written.  If you say that it should be on the non-judicial stamp paper, it is valid when executed in India, but since the other party is from foreign country the stamp duty at foreign country is not valid in India vis a vis. 
The contract signed, witnessed and attested by a notary of that country sent back to you and you pay the proper stamp duty here in India for that. 
7) Plain paper
8) Any other document relied upon and the same has been recitd in the contract agreement can be enclosed as annexure to the contract. 
T Kalaiselvan
Advocate, Vellore
19746 Answers
192 Consultations

5.0 on 5.0

1) a copy of signed contract should be kept with B for his record 

2) it is immaterial which party signs contract first . 

3)if other party does not sign there is no concluded contract between the parties 

4)ask for signed copy of the contract from the other party 
Ajay Sethi
Advocate, Mumbai
29584 Answers
1609 Consultations

5.0 on 5.0

1) A email contract to B for signature and B sends back after signing. After that A signs and keeps for own record. Is it necessary for A to send final contract to B that contains both signature?

Both the parties are required to keep a set of original contract papers which ought to have been prepared in duplicate, which will ensure protection against any manipulation of the contents at a later stage by any party to the contract without the consent or knowledge of the other party. 

2) Which party should sign contract first because in online medium both parties sign at different time?

It makes no difference because it is mandatory that both parties are to sign the papers.

3) What happens if after sending a signed contract the other party decides to withdraw? (You don't know whether that party actually signed or not but it carries your signature)

A contract paper without the consent (signature  acknowledging the contract) of any party to the contract is void and  cannot be enforced in law.  

4) If you send a contract in Word file the other party often insert scan copy of his signature image (if digital signature not available). Will not that become valid or should you ask for real signature?

It is advisable to send the hard copy of the contract papers physically signed by both the parties to each other besides exchanging them through emails.
T Kalaiselvan
Advocate, Vellore
19746 Answers
192 Consultations

5.0 on 5.0

Section 18 of the Indian Stamp Act 1899 stated that "every instrument chargeable with duty executed only out of India and not being a bill of exchange or promissory note, may be stamped within three months after it has been first received in India.
1) Yes, it is mandatory on the part of A to send the contract to B after signing the contract.
2) It is of of little importance in a contract as to who has to sign first, whereas the contract become valid if both the parties signed the instrument.
3) As stated earlier, the contract become valid contract only if both the parties signed the contract and if either of the party withdraw it before signing the instrument, hence can not be enforceable in the court of law.
4) The contract should invariably be carried out through digital signature (D.S) In the absence of such D.S, the parties should send the contract through pdf document, where the tempering is difficult. Last page of the contract where signatures are required may be scanned and place with remaining part of the contract.
Rajinder Kumar
Advocate, New Delhi
68 Answers
4 Consultations

5.0 on 5.0

1.There is no hard and first rule as to who will initiate contract signing process. Either party can do it,

2. A can snd the contract which B can sign if he agrees with the terms of the contract,

3.Both should agree to one contrct only which will be finally signed by both of them,

4.Either of the party should send draft copy of the contract to the other party to agree for signing the contract and if agreed with the raft copy, then send the final copy,

5.If both the parties agree, to the erms of the contract then A can sign and send it signed copy to B for is signature,

6.If B efuses to sign the contract then there will be no contract at all,

7.Both A and B should ake two copies of the original contract which should be mentioned in tye contract itself and each one can keep one original,

8.Any alteration/correction  should be signed by both tye parties. So, no one can arbitrarily alter any term of the contract,

9. The date of effect of the contract will be mentioned in the begining of the recital of the contract,

10.It is difficult to verify personal details online. So, blind online contract is risky,

11.Amongst two numbers witness, one from each side, both can take signatures of their individual witness while signing the contract,

12. since, online contract in India is still in the nascent stage, it is suggested that you sign offline contract after settling about bthe terms of the contract through emails,

13. the contract should be made on non judicial stamp paper ( if tye contract is Idia specific),

14.To keep the original of the contract make two sets of original as advised above.
Krishna Kishore Ganguly
Advocate, Kolkata
14155 Answers
316 Consultations

5.0 on 5.0

1. Yes, B can keep scanned copy of the signed contract,

2.There is no hard and fast rule as to who will sign the contract first. Anyone can sign first,

3. till he signs, the ontract is not valid and you can cancel your offer in connection with the cobntrcat if he fails to sign and send you the contract within a specified period,

4.You should ask for his real signature before he sends back the acanned copy of the contract to you after being signed by both the paties.
Krishna Kishore Ganguly
Advocate, Kolkata
14155 Answers
316 Consultations

5.0 on 5.0

1. The contract is not required to be executed on a stamp paper. 

2. A contract sent through email has to be digitally signed. The final contract has to be mutually exchanged.

3. The party which receives the copy of contract should sign the contract first in time.

4. Unless the other party signs the draft of the contract it will not come into existence. 

5. A scanned copy cannot suffice.
Ashish Davessar
Advocate, Jaipur
20072 Answers
529 Consultations

5.0 on 5.0

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