I love this post from New York business lawyer Imke Ratschko regarding the best practices in executing a contract.
Her tips (and my comments):
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Don't let technology or anyone else fool you. This is a great lesson. Once I negotiated a employment contract with another lawyer for several hours. The last version of the day contained language that had been inserted for the first time and not discussed previously. If I had not read the entire agreement (for what seemed like the tenth time) we would not have caught it.
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Date the contract. It goes without saying but it often does not happen. It is important to date contracts for a variety of reasons including statute of limitations and it puts the dealings between the parties in chronological context.
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Both parties should sign the agreement. Again, it is surprising how often this does not get done. While the contract still may be enforceable without both signatures it is obviously best to have the signatures and avoid a potential dispute about whether a party agreed to the terms.
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Initial last minute changes to the contract. Sometimes changes occur at the last minute. If this occurs each party should initial by each change. If time is available rewriting the language is always the best alternative.
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Sign in your correct capacity. If you are a corporate officer, you should sign in your corporate capacity such as President or Vice-President. If you have an LLC sign using "Member" after your name or use your title. This helps limit personal liability and indicates to the other side that you are signing the agreement on behalf of your company and not personally. Similarly, make sure the entity is the party to the agreement and not you individually.
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Check the other party's authority to sign. You should make sure the person signing the agreement on behalf of the other party has authority to do so. It is often a good idea to include language in the signature block that indicates the agreement is signed by an authorized representative of each party.
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Get an original executed contract of the contract for your files. It is generally not required under the law but it is often helpful to make sure that each party to the contract has an originally executed agreement. So if there are two parties you will sign two sets of the agreement. (Update: See below for a comment from David Wall on electronic signatures - he makes a great point and offers some wise information).
Photo on flickr by diylibrarian
