Tired of shuffling through endless stacks of paper or waiting on that all-important ink signature that seems to take forever to arrive? You’re not alone.
Online contracts represent a major step forward from paper-based processes, helping get deals done more quickly, efficiently and securely. To see how, we’ve got to start by understanding what exactly online contracts are.
What are online contracts?
Online contracts are agreements that can be created, signed, and managed entirely digitally. They are dynamic, editable files that can be tracked in real time, offering efficiency, security, cost savings, and adaptability.
One of their key benefits is efficiency. Unlike traditional contracts that involve multiple time-consuming steps, digital contracts streamline the process. Templates can be used to draft, review, sign, and file contracts in a fraction of the time.
Enhanced security is another advantage, with encryption and multi-factor authentication ensuring only authorized individuals access sensitive documents. Digital contracts are stored securely in the cloud, protecting them from loss or damage.
Cost savings are significant, as digital contracts eliminate the need for paper, ink, mailing supplies, and storage space. They also align with sustainability efforts, reducing carbon footprints.
Finally, digital contracts offer adaptability and convenience across various industries. They can be tailored to meet specific sector requirements, such as interactive medical histories in healthcare contracts or embedded images in real estate agreements. This flexibility makes them invaluable tools in today’s business landscape.
Why should your business adopt online contracts?
Your business should adopt online contracts because they are more efficient, cost-effective, secure, and convenient than traditional paper contracts. They’re also legally valid and binding, providing certain requirements are met. Overall, they provide the following five benefits:
- Efficiency in the signing process
- Enhanced security with audit trails
- Cost savings and eco-friendliness
- Increased flexibility and convenience
- Legal validity in most cases
Now let’s look at each of these benefits in greater detail.
Efficiency in the signing process
The traditional contract signing process is notoriously time-consuming. You have to coordinate schedules for face-to-face meetings or wait endlessly for courier services to deliver essential documents. Cloud contract management eliminates these bottlenecks entirely. With cloud-based contract management, you can sign digital contracts any time, anywhere. Imagine finalizing a business deal while waiting for your morning coffee—that’s how efficient it can be.
Enhanced security with audit trails
Security is often a concern when transitioning from paper to electronic contracts. However, the safety features offered by digital contracts are far more advanced. Each step of the signing process is trackable through audit trails, adding layers of transparency and accountability that an ink signature just can’t provide. With electronic signatures in global and national transactions, you can rest assured that your contracts meet legal requirements and safeguard sensitive information.
Cost savings and eco-friendliness
Maintaining a traditional contract system can be costly. The expenses related to paper, ink, printing, and postage can add up over time. Switching to electronic contracts not only reduces these costs but also contributes to sustainability, making it an eco-friendly option that aligns with the values of sustainability-conscious organizations.
Increased flexibility and convenience
The advent of Contract Lifecycle Management (CLM) software like Concord allows you to create online contracts with ease. With customizable contract templates, you can efficiently draft contracts tailored to different agreements. Parties involved can peruse terms and conditions at their convenience and even integrate credit card payment options, further simplifying the process.
Legal validity in most cases
It’s a common misconception that electronic contracts are not as legally valid as paper contracts. The truth is, electronic signatures are legally binding as long as they meet the following four criteria:
- Intent to sign
You must provide evidence that all parties consented to engage in electronic transactions. Sometimes, the context of the situation can serve as proof in court. However, for added security, particularly with clients, many agreements incorporate an electronic signature clause explicitly stating the parties’ agreement to the legal validity of electronic signatures.
- Consent to do business electronically
To use an electronic record in a customer transaction, you must furnish a UETA Consumer Consent Disclosure. Additionally, you need to demonstrate that the customer agreed to use electronic records for the transaction, typically outlined in the e-signature clause, and that the customer has not withdrawn their consent.
- Link between signature and record
An e-signature holds legal weight only if it includes an audit trail, documenting details such as the timestamp of the signing event and its initiator. This trail can be automatically generated by your digital signing tool. It should record the process used to create the signature and include a textual or graphic statement affirming the authentication of the signature.
- Record retention
All digital signatures must be storable and retrievable upon request. This means that a random scribble is not legally binding in a digital agreement since there is no way to ascertain its origin or method of addition. In case you need to prove the legal validity of an e-signature in court, as discussed in the section below, an audit trail becomes invaluable as evidence.
Managing your online contracts with CLM software
The benefits of online contracts can be further amplified when managed through contract management software. Contract management platforms offer features like electronic signatures, contract agreements, and even credit card integrations.
Approval workflows speed up the process, and deadline notifications keep everyone on track. that can help you manage your contracts more effectively. Here are 11 more crucial CLM features, including electronic signatures, contract agreements, and even credit card integrations to facilitate seamless transactions.
One of our clients, Yates Construction, has “saved thousands of dollars every month in labor hours” by adopting a contract lifecycle management (CLM) approach. Instead of having to manually send contracts as email attachments, worry about version control, and scan every agreement for third-party changes, they negotiate live in online contract documents – all of which are stored securely in a searchable contract database.
The benefits of adopting online contracts are numerous and varied, from streamlining the signing process and enhancing security with audit trails to cutting costs and offering enhanced flexibility.
If you aim to bring efficiency, security, and modernization into your contract administration, online contracts are a great first step. Beyond that, a full-featured contract lifecycle management (CLM) platform can help you save even more time and money, by automating key steps like approvals, e-signing, and deadline notifications. Now’s a great time to make the switch.