Electronic Contracts

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Electronic Contracts

A Brief Introduction About Electronic Contracts

Electronic Contracts is known to be a contract that is made and signed electronically. You might have written a contract made in Microsoft Word, but rather than printing it out, you email it to a person, and they sign the contract electronically and email it back to you.

Many of us recognize that e-contracts are created when you click the “I Agree” button. We, as customers, click that button at a webpage page comprising the long and complicated document of terms of the license before we can download the application, listen to the music, or start using the program, etc.

One other way you might have signed with your e-signature is by typing your name into a signature box and then checking the box below it that states you understand that this is your legal signature.

Who Takes Electronic Contracts?

Electronic Contracts or e-contracts are a form of a contract made online. The interaction made between the parties in forming the contract could be done by many different electronic means, such as email, through a computer program, or through two electronic agents programmed to identify the formation of the contract.

Most of the electronic contract manufacturing that include distribution and order fulfillment, functional testing and engineering design use e-contracts that require electronic contract signing or signatures.  Further, electronic contracts for photographers can be customized too.

Purpose of  Electronic Contracts

The purpose of Electronic Contracts is to allow firms to communicate online with clients and use e-signatures to conduct their business. However, the requirement for Electronic Contracts is the same as a traditional contracts’ requirements, which means in order to become a binding agreement, it should include an offer, an acceptance, consideration, competency, capacity, etc.

Contents of  Electronic Contracts

The content of E-Contracts is;

  • Obtaining consent from parties– The parties must affirmatively consent to use an e-contract or electronic signatures. The signers could show their consent by agreeing in an email or just e-signing an emailed contract. In a few instances, though, the law may need a clear agreement to carry out business electronically.
  • Fully informing parties regarding what their signature means – The signers shall receive a clear indication that they agree in order to be bound with the terms of a document when they sign it. It should be clear that they are not signing to show they only received or reviewed the document.
  • Giving parties other options – Electronic signatures laws make paper needless in numerous situations, but few customers and businesses still may want to use paper. Most e-signature laws need that anyone wishing to make use of paper is permitted to opt-out of using e-contracts.
  • Informing parties that they could withdraw consent– The signers are required to be informed that they could withdraw their consent towards using e-signatures or e-contracts at any point. They also require an explanation of the process for withdrawing consent.
  • Keeping copies of the documents – The party making the contract should keep electronic or paper copies of the signed documents and either furnish copies towards the other party or let the party know how to obtain the copies.

How to Draft Electronic Contracts?

When preparing an electronic contract, that document must be signed electronically. The points to consider while drafting the contract includes:

  • Intention to Sign – The signer should show clear intent to sign the document. This intent is presented through signing electronically, by typing their name or clicking an accept box.
  • Consent to Perform the Business Electronically – Part of the contract should comprise a clause that specifies all parties involved are consenting towards having the transaction happen electronically.
  • Record Retention – The contract should remain accessible towards both parties and retained in the form it was when signed. This condition is effortlessly solved by the next rule.
  • Signed Copies – Both parties must obtain a copy of the signed document. Most e-signature applications could execute this automatically.
  • Opt-out Clause – The signer should always have the option to decline to sign electronically and would rather receive a physical copy towards signing in-person and send it back. Businesses must be prepared for this occurrence.

How does the E-Sign act recognize e-contracts as equivalent to written contracts? The documents that are signed electronically shall have the same legal protections as those that are signed in the paper. In the United States, E-Sign Act states that transactions must not be “denied legal effect” merely because of their electronic form; business people and customers could have full confidence that their electronic signatures and contracts are lawfully valid. When an electronic signature is achieved in a suitable way, using compliant technologies, certifications, and authentications, it would have full validity as per the law.

Benefits and Drawbacks of the Electronic Contracts


  • By making an electronic contract and through electronic signatures, the party could worry less about security than with paper contracts, which could easily be tampered with.
  • The automated procedures of electronic signing could decrease the financial impact of human error like signing mistakes, which could slow down the procedure or may cause costly issues if initially undetected.


  • Some electronic signatures may be unsafe as there could be some harmful electronic software which the parties may not be aware of.
  • e-contracts are efficient and easy; however, it could also cause a problem. There is a chance that you could miss a significant provision or confuse an interpreted meaning when reading an online consent form, text message, or email, than when you are speaking with them in person.

What Happens in Case of Violation?

For electronic signatures contracts to be valid and enforceable, the document is required to be valid and enforceable. This implies that the electronic document should not be altered in any way. The document should be complete, which implies that it was signed by all the parties. It should also be available to all the parties as a savable and printable document that could be retrieved later. In case either of the party doesn’t perform the mentioned promises specified in a contract, the contract is held to be breached(1) and could be terminated.

Thus, while making an electronic contract, it is written electronically, on a computer and emailed to a business entity and the business entity emails back with an electronic signature signifying acceptance.