Gone are the days when large numbers of papers were couriered or faxed to enter into a business agreement. In the present day, companies believe in sending these contracts via mail so that they can be signed faster, and work can be started immediately. All-in-all, online contracts are making their way thus leaving the pen paper-based contracts behind.
The recent technological advancement has led to an immense change in the standard of the lifestyle of people. Hence, communication is no more limited to geographical limits, and the information is transferred more quickly than ever before. With the emergence of eCommerce, there is a quick elevation in the use of online contracts or eContract.
Online contracts also known as eContract refer to the contracts that are created and signed over the Internet. They are considered to be a fast and convenient way for individuals and organizations to enter into a legally binding agreement.
From consumer to business agreements to government filings – they are now being used for a wide range of purposes.
Online contracts are highly beneficial for freelancers as well for they are the lone wolf in a world full of self-employed. It’s especially important for freelancers for it jots down the essential elements such as payment terms or time frames to share with a new client at the time of signing the contract.
Contracts will not only protect you but will also protect your work. It also reduces the room for interpretation, error, surprise and at worst lack of payment. Beware of the clients who refuse to sign the contract, such behaviour typically indicate a hidden agenda.
What Is an Online Contract
With the advancement in internet and technology, online contracts are gaining importance especially in multiplicity and reach. In layman terms, if you need an answer to the question what is an online contract? Then it is an agreement, executed, modelled and signed electronically, usually over the internet.
They are similar in conception and created in the same manner in which a traditional paper-based contract is drafted.
However, lawyers still prefer to make the client’s sign of paper contracts. These documents include divorce agreements, wills and trusts, repossession notices, court orders, among others.
Also, notarized contracts cannot be signed online. Laws such as Electronic Signatures in Global and National Commerce Act makes electronic signatures both valid and enforceable just like paper and ink documents.
Another reason why the online agreement is replacing the paper and ink is the time they save. It takes approx two weeks or so to sign a paper and ink contract sent via post. With an electronic mail, it reaches them in one or two minutes and then by using the software they can sign it immediately.
Also, electronic contracts have less number of errors. It’s also hard to manipulate or make changes in the online contract, particularly if they have been signed using an online service.
Ultimately, the ease of use and security that online contract makers provide makes them a viable replacement for paper and ink contracts.
Everything You Need To Know About Online Contracts
- They are Legally Accepted – With the introduction of ESIGN in 2000, it is legally accepted worldwide to use electronic signatures to serve the purposes. The law also encourages the use of electronic record keeping. Whether you sign using a pen, or you sign online – they are considered the same in the eyes of law.
- They are Widely Used – Since technology continues to evolve with each passing day, many companies have started utilizing cloud computing. To remain competitive, companies are making a paradigm shift to offering their products and services online. Generally, several contractual transactions are completed electronically.
- They Save Time and Money – One obvious reason is that electronic contracts save a lot of time and money. No longer have you had to bear the expenses related to printing, filing and mailing together with waiting for the parcel to arrive and return? Online platforms have made it easier to enter, negotiate and terminate contracts.
- They Enhance Security – Another advantage of online contracts is that it boosts data security. Companies nowadays, rely on document repositories to create, share, and store all important papers for they are safe to use. Contracts no more remain susceptible and with all right security measures implemented, they remain virtually impenetrable.
- They Facilitate Record-Keeping – Another advantage is there are fewer chances of losing or misplacing the documents. When you save all important documents at one central location it keeps you organized, thereby, facilitating the entire record-keeping process. Also, the filing, locating and searching of documents becomes efficient and rapid.
How to Make/Sign an Online Contract
Do you want to create a contract online? With Adobe Acrobat, DocuSign, WordPress and Google Form it has become a lot easier to sign contracts online since you don’t have to print, scan or fax it.
Adobe Acrobat has the feature of adding electronic signatures. This has made it easier to store and use the image of the signature. The program also allows you to create digital signature certificates.
Online contract makers such as DocuSign are a platform to upload and send contracts completely in the cloud, thus eliminating the need for special software programs.
Some online form providers comprise templates and electronic signature integration tools to create contracts instantly and send them across to the other party for approval. Creating and signing online contracts is a win-win situation for both the parties in the following ways:
- Easy To Sign – The online contracts allows the clients to sign documents and contracts just by clicking their mouse or touch screen.
- Is More Convenient – No more you have to undergo the hassle of sending emails back and forth to get the documents signed.
- Close The Deals Faster – The signed online contract forms leads to faster business growth since you can close more deals effectively and efficiently.
Before You Create an Online Contract
When you have to sign a contract online, many businesses avoid seeking the services of a lawyer thereby saving on legal fees. They believe in doing a quick Google search and creating all papers by themselves.
However, a lawyer can ensure that the agreement is written correctly thus avoiding legal issues down the lane.
A typical online contract usually comprises of:
- Terms of service and payment
- Asking physical address and phone number
- Get the signature of your client
The following tools are used for making an online contract as well as for signing a contract online:
- Photobiz – They have a huge collection of contract templates to choose from and systematically store all your documents.
- Google Form – A free tool by Google to create easily shareable documents and helps store your files in a secured manner.
- WordPress Online Contract – This plugin helps you create, sign, message, send and archive a large number of contracts.
Here are the following contracts drafting tips that are very helpful:
- Avoid ambiguity for it fosters confusion and misinterpretation, thus exposing you to legal risk.
- Strive to keep contracts crisp and be informative in every sentence, define the clear purpose and reduce complexity.
- In association with your contract partner, draft an outline of the document that both parties understand and abide with.
- Ensure that all the important terms have been defined so that even the third party can understand in one go.
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Types of Online Contract
From handshakes and paper to electronics and from clunky computers to Macbook and yoga tablets, eContract is a staple for contract information in the present century. Generally, there are three types of online contract. They are as follows:
Shrink Wrap Contracts – Shrink wrap contracts is the type of license agreement for software purchases such as CD Rom. In this eContract, the terms and conditions to access such software products are laid down for the person buying it, in regards to the packaging of the software product.
In such types of eContract, the users have the option to return the software if there are new terms, and those are not up to his liking. The user here is also eligible for a full refund.
Web or Click Wrap Agreements – Also known as web agreements, they form part of the software. These agreements are rigid in nature, and under no circumstance, you can negotiate it. They are click-based contracts in which the user has to give their approval by clicking on the “I Accept,” or “OK” tab.
The user here has only got two options either to agree and use the particular software or to disagree and not to use the specific software. Often we all come across such types of online contracts.
Browse Wrap Agreements – Browse wrap agreements are usually found on the websites or when you download a product. Basically, this agreement binds two or more parties through the website. Generally, these contracts are hidden, and the user has to find them on their own by browsing the website.
All-in-all, the user has to accept the laid down terms and conditions to use the website frequently. In our daily lives, we come across such types of contracts, and we accept them.
While the aforementioned online contracts are witnessed frequently in our day to day lives, the other types of eContract include contracts for consultants, employment contracts, resale and sale agreements, distributor contracts, licensing agreements and contracts for source code escrow.
How to Make Money with Online Contract
The contracts must evolve from time-consuming processes to right now methods. Following are the few ways to make money with online contract:
ARBITRAGE – Arbitrage is when you hire a middleman to work for you for a fixed pay. In other words, you can work as an online contract agency. For example, if a company hires you to be the guarantor for the deal, or as a middleman, you would accept the work, and you will charge both the parties.
When you charge both the parties, you’ll end up making a good amount. Also, in such case if either of them runs into loss, you nowhere have a role to play in it, you’ll get your fixed amount every month.
ADD MARK UP FEES – By being a middleman, you can earn a certain percentage of commission whenever you make a contract online. Although the exact amount can vary each time, the commission of around 10-15% is common amongst online contractors. Sometimes, the business owners set a fixed commission fee instead of the percentage amount. It is recommended to determine beforehand which type of commission will be best suitable for you, then only decide to work for the company. Make it very clear that you will bear no charge for losses, your commission is fixed.
HAVE A MARKETING PLAN – The more professional profile you will have, the easier it will be for you to find work, charge a higher rate and replace clients frequently. Be in touch with the businesses that know you. Determine your competitors and the strategies they adopt to handle the clients.
This will help you list down your prices and create your marketing plan. You can also reach out to the targeted audience via email marketing. You can also start giving consultations to the small business as to why online contracting is good.
CREDIBILITY – When you offer services as an online contractor or middleman, ensure that you have ample references on hand. This is because you’re providing the services without the backend support of an established firm. Try to seek BBB accreditation and any other label that helps generate a sense of security and trustworthiness towards you.
At the same time, try and build a strong Internet presence that is linked to something like a brick and mortar office. Consider having a physical address and trading hours to generate loyalty amongst the clients.
BE TRANSPARENT – People like to know whether or not they can trust the middleman or the online contract agency. Hence, make it clear to all your clients how you run your business and how the money flows in your contract work.
Always be transparent in sharing with your customers the mode of your supply. Break down the cost. This will help the buyer understand more effectively where the money is going. It prevents the feeling of betrayal on both the parts if later on, someone shares any information. Also, always be flexible.
The online contract agency or middleman put in their best efforts to cater to the needs of the customers by providing the solutions that simplify the contract management. They also allow legal departments to help make businesses informed decisions based on the data enclosed in the agreement.
They are dedicated to bringing forth the solutions that are intuitive, and affordable for any & every type of business. Online contract work is both simple and straightforward provided you have the right solution by your side.
Online contracts always close the loopholes and define the grey areas within gigs.