Necessary Components of a Legally Binding Document
To understand our question, we must first know what makes a document legally binding.
- Intention to create legal relations: There must be an intention that the document shall have legal consequences. The mere fact that the parties intend to be bound by the document does not necessarily make it legally binding. However, a clear intention to create legal relations will be strong evidence.
- Offer: One party must unequivocally propose to do or abstain from doing something as an exchange for the other party doing or abstaining from doing something else.
- Acceptance: A party accepting an offer must do so in the terms of which it is made. A counter offer constitutes a rejection of the original offer.
- Consideration: The parties must be able to demonstrate that they have at the very least provided something of value.
The above are some of the essential ingredients which make an agreement legally binding and enforceable.
In addition , there are a number of legal principles which apply to most agreements, regardless of the intentions of the parties. These general legal principles include the four points below.
- Legality – The terms must not be illegal.
- Fairness – Unconscionable contracts are unenforceable.
- Reasonableness – Courts will not grant an order for specific performance of a contract which is unreasonable.
- Capacity – A juristic person cannot enter into an agreement unless the person has the requisite authority.
Notarization and Its Importance in Legally Binding Documents
At its core, a notary public’s function is simple. A notary’s job is to verify the identity of the person signing a document, witnesses the signature, and affixes his or her own signature and seal. It’s this last part that usually causes people to assume that notarization is mandatory for all legal documents. But that’s not exactly the case; the purpose of notarization is broader than simply making a document ‘official’.
Notarization is named after the Latin word notarius. A notary’s original job description included being a form of administration —back when the job was created in medieval Europe. Their responsibilities included sorting through correspondence, filing it, and also writing and maintaining important documents such as property records and treaties. In short, a notary was an administrative assistant of sorts for the elite class. While some of us are thinking that sounds like a good job, we should note that notaries were also essentially clerks of the law courts, and they were responsible for ensuring the accuracy and authenticity of legal documentation and procedures.
Notaries have actually existed since ancient Roman times, but in their modern capacity as verification experts, their purpose is to ensure that a document conforms with proper execution requirements. All binding legal documents have execution requirements whether they are: deeds, wills, surrogate court orders, mortgages, real estate documents, corporate contracts, or others. While each of these categories has its own special rules, which we’ll leave to another day, they all have requirements that must be met in order for that document to be legally binding after it is financed and executed.
Did you know that simply notarizing a document does not automatically make it legally binding? This is an important fact because it means that notarization is not compulsory for every single piece of documentation. So why even bother notarizing a document when it doesn’t make a document valid? Good question. A notarized document is presumed to be trustworthy and represents a strong presumption of validity. In this way, notarization is just a guideline that helps courts find out the facts about a document, and it’s a pretty good one at that.
So here’s how it’ll help you in most circumstances: if at any time the validity of a document is put into dispute, such as during trial, a notarized document will carry much more weight than an unnotarized one. Courts refer to this as a presumption of law transfer. Because a document has been both verified by the notary and includes the notarization’s seal, you’re sidestepping a lot of hassle and time that would otherwise be spent proving its validity.
Legality of Non Notarized Documents
There are situations in which non notarized documents still have legal binding validity. It is important to understand those circumstances, as well as the limitations. The biggest distinction to make is that non notarized documents can be legally binding as long as the parties involved had a mutual consent or understanding. This is the basic idea behind contracts of any type, and they do not need to be signed by a notary to be considered mutually agreed upon.
Any landlords asking a potential tenant to have a lease or rental agreement notarized should consider alternative options. Even though it is true that a notary can validate the parties involved in an agreement, it is not necessary to have a rental or lease notarized for it to become legally binding. If the landlord or property owner attempts to evict a tenant because it did not have the lease or rental agreement notarized, they will likely be in violation of federal law, not to mention fair housing laws.
A lending institution cannot force you to have a signature notarized on any type of mortgage or deed paperwork. Because mortgages and deeds are so highly regulated by federal laws, even having your name notarized on the paperwork will not protect against any defects or omissions on the loan or deed agreement. Ultimately, if there is a defect present, you will have no choice but to go through the legal process to have that defect corrected.
Instances That Mandate Notarization
As mentioned previously, the majority of documents used in business contracts do not require notarization under the law. However, there are some exceptions; and even when these documents ordinarily would not require notarization, a lender or other third party may ask to have the document notarized for its own reasons. Some documents which require notarization may include real estate deeds, wills, powers of attorney—particularly for businesses—revocation of wills and powers of attorney, conveyances, consents, or authorizations, and certain acknowledgments. There are reasons that statutes exist to require notarized signatures in certain documents. For example, Section 706 of the Georgia General Assembly, under Title 53, Chapter 4, Part 1, Sections 706-710, the "Will Signatures Attestation Act", requires that a memorandum of a will be certified on affidavit as to its signature, so that the validity of the document will later be unquestionable by a third party (i.e., a court). Will attestations must be done in front of two witnesses and a Notary Public, so any Donee or Attorney in Fact (also referred to as "POA") will have attempts to use them defeated before a court, if they are not notarized properly. It is usually in a person’s best interest to have their documents notarized at the time they are signed or witnessed, so that these matters can be avoided in the future.
Notarization Laws by State
The requirements for notarization can vary significantly, even between jurisdictions on opposite sides of the same country. While there are a number of general rules of thumb regarding notarization, it’s essential to bear in mind that each state in the U.S., and every country in the world, has lent its own interpretation to the notarization process.
For example, in Montana, to be valid, a contract signed in the presence of a notary public must be acknowledged by the notary public to have been signed freely. In Wisconsin, a contract which is witnessed requires only one witness when the contract is signed in the physical presence of a notary.
According to California law, contracts that are not finalized with a signature in the physical presence of a notary public must be in writing. However, the California Corporations Code permits stockholder action by written consent without a meeting unless otherwise stated in the company’s bylaws. Thus, while second factor may appear inconsistent with the writing requirement, the California Corporations Code permits a process whereby stockholder agreements are binding without a physical signature in the presence of a notary public .
Under the Illinois law, not all contracts require notarization to be legally binding. Even if Illinois does not require notarization, individuals can still request a notarized signature for their own records if they wish to. For legal documents that are filed with a public office, a notary is not required. However, documents that are filed with a court do require a notarized signature. For foreign corporations doing business in Illinois corporations, they must complete the Business Entity Application for Admission and Authorization from Foreign Entity. On the form, corporations doing business in Illinois will also have to pay a filing fee and provide a notarized affidavit.
In the United Kingdom, there are no federal laws regarding guidance or direction about witnessing or notarizing documents. It is up to the parties entering a legal agreement to determine whether a notary public is required. However, according to some Canadian lawyer blogs, at least one province (Newfoundland) requires compliance with the legislation from Britain regarding a Commissioner of Oath for documents to be validly executed.
Helpful Hints on Ensuring the Legality of Your Document
When it comes to legal documents, practicality is the key to ensuring enforceability. Here are some essential tips for individuals and businesses:
- Always aim for clarity. The more straightforward a document is, the less gray areas there will be. Use plain language whenever possible and feel free to add footnotes or explanations when necessary.
- Include specific details. Details help establish context. If you’re signing a loan agreement, indicate the specific amount being borrowed and the terms of repayment. In a rental agreement, be specific about monthly rent, utilities, responsibilities, and other key points.
- Have all the parties sign. If there are multiple parties agreeing to something, make sure that everybody involved is required to sign. The more verifying signatures, the more binding the document will be.
- Don’t gloss over the fine print but don’t add to it unnecessarily either. If you’ve got a lot of extra legalese to include, consider having a lawyer draft an addendum for additional items or revisions so that the main document is not clouded by technicalities.
- Trust but verify. If the person or company asking you to sign something seems to have less than honorable intentions, it might be in your best interest to consult with a legal representative or a notary before signing anything.
- Seek legal advice. If a document involves a large sum of money or weighty decision, consulting with a lawyer can help ensure that you fully understand its implications and the best way to approach it.
- Sturdy storage. Make sure documents are stored in a safe place, such as a filing cabinet, a safe, or a bank deposit box. If something happens to they may lose their power.
- Have things notarized when necessary. Not all documents need to be notarized but some do. If you aren’t sure, it doesn’t hurt to have something notarized.
Final Thoughts
In closing, it is important to understand that the power of a document goes beyond just the presence of a signature. While notarization certainly carries weight, it is far from the only factor to consider. In specific cases , the notarization of a document may be unnecessary and the validity of your document lies more on the matter of enforceability and intent than anything else. Laws differ from state to state and are largely situational, so if you have any doubts about whether or not your specific contract needs to be notarized, you should seek counsel from an experienced lawyer who can give you the legal advice you need for your case.