Signing a contract

Under British Columbia law, a few types of contracts must be signed with a handwritten signature for them to be considered enforceable. An example of this is a transfer of real property. 

For the vast majority of contracts, signing with an electronic signature is fine. 

An electronic signature is information in electronic form that you create or adopt to sign something. It can take the form of typing your name into a contract or inserting an electronic image of your handwritten signature.

Under BC law, some types of contracts must be witnessed. As well, there can be specific requirements for who can serve as a witness. Again, a transfer of real property is an example. A party’s signature on the transfer document must be witnessed, and the witness must be an “officer” as defined under the law (which includes professionals such as lawyers, notaries public, judges, and a few other occupations).

The witness must be present when the party who requires the witness signs.

Unless the contract requires a witness or to be in writing, it doesn’t strictly need a signature to be binding. Once you’ve agreed on the essential terms (more on this here), that can be enough to signal that you’ve consented to the contract. It might be easier to prove the existence of a contract by having the agreement signed, but it’s not necessarily required. Be forewarned!

The two parties to a contract can sign it separately, and on different days or times.

If you’re dealing with someone you don’t know, investigate their background. For example, if you’re dealing with a person: 

• Google their name.

• Check out their social media to see how they’re presenting themselves to the world.

• Check out online discussions to see what others are saying about them.

If you’re dealing with a business, do all of the above, and also:

• Ask for references.

• Check with the Better Business Bureau serving your area to see whether they’ve been reviewed. 

• Run a corporate search — the BC Registry can run a search on a company to see if it actually exists, has any outstanding lawsuits filed against it, and so on.

If you have any doubts, do not sign the contract. 

Before you sign a contract, make sure you read it and understand it. Saying later that you did not understand the contract you signed will not usually get you out of the contract.

Understand the promises that are being made

Make sure you know what each party is promising to do or pay. 

Be prepared to live up to all provisions in the contract. Don’t trust the other party’s oral assurance that something in the contract doesn’t matter. They may say, “Oh, don’t worry about that wording, it’s just a formality.” Do worry. It isn’t just a formality.

Cross out anything you don’t agree with, and make sure you both initial the change before you sign. 

If you’re paying a deposit, make sure you understand: 

• if the money will go toward the final purchase price of the item

• what happens to the deposit if you cancel the contract

Understand any guarantees or warranties  

Make sure you understand exactly what the other party is going to do for you, if anything, in terms of offering a warranty or guarantee on a good or service. 

A warranty or guarantee is a promise a seller makes about the quality of the goods or services sold. And it outlines what the seller will do if there are problems.

The term "guaranteed,” when used alone, means nothing. Guaranteed for what? To last one week? It’s important to know and understand the terms of the guarantee or warranty, not just the fact that there is one.

Be aware that under the law, a level of quality, performance, and durability is implied in every contract. When you buy something from a business, it has to:

• be fit for the purpose you bought it for (that is, it has to function for its intended purpose),

• be of “merchantable” quality (it has to work and be undamaged),  

• be durable for a reasonable period of time, and

• match the advertised description.

These conditions are sometimes referred to as the legal warranty. They are established by a law called the Sale of Goods Act. This legal warranty is always there. It applies whether the seller mentions it or not. It exists on top of any warranty the seller or manufacturer might provide.

Learn more about how warranties and guarantees work.

Understand how to end the contract

Find out if you’re able to cancel the contract. If you can cancel, determine how. Ask about what reasons you’d have to have.

Never sign a contract that contains blank spaces. For example, a contract may say:

“The work to be conducted is detailed as follows: _________.”

Put a line through all blank spaces. That’s so nothing can be added later by another party.

Be alert for anything in the contract that allows the other party to substitute items or change the contract after you have signed it. An example of a sentence in the contract that could allow this might read:

“The seller reserves the right to make substitutions.”

Language like that means you may not get the item you agreed to buy. Discuss this with the other party before agreeing to sign the contract.

Make sure any verbal agreements or claims, by either party, are written into the contract. Did the other party say anything that persuaded you to enter into the contract? Put what was said in writing. Have both parties initial the addition. 

For example, let’s say you’re buying a car. The seller told you the sale will only go through if there’s a mechanical inspection that you approve. Make sure this statement is written into the contract and initialled by both of you.

One last thing: before signing, check if there is a date on the contract — this is important, since the date on the contract is when your obligations to one another begin. If there’s already a date on the contract, and it’s in the past, consider updating it to today’s date before signing.

Never let yourself be pressured into signing. Take your time.

After the contract is all signed, get a copy of the contract for your reference. Make sure the other party (or parties) has one as well.

Possibly. You and the other party may have had back-and-forth conversations and emails. Those discussions can create an enforceable contract if:

• both parties agreed on all the essential terms, and

• a reasonable bystander would conclude the parties intended to be bound, and 

• signing a formal contract was just a formality. 

If these factors are all present, it doesn’t matter if the parties never sign a written agreement. They can be bound by the promises they made in the preliminary communications.