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Could a signature notarization reduce contract disputes?

Contracts are an integral part of every business. As a result, a great deal of time and care is usually put into the negotiation and drafting of each agreement. Despite all of that effort, in some cases disputes involving a contract will arise. Such disputes can be expensive and time consuming to resolve.

Breach of contract claims can arise in numerous situations. Likewise there are multiple approaches that might be taken to resolve them. When possible alternative dispute resolution methods like arbitration, mediation or negotiation can be employed. These are appealing to many businesses because they are less expensive than going to court and usually are resolved quickly. In situations where those approaches are not effective, a contract dispute can be taken to trial.

When it is necessary to go to court to resolve a contract dispute many factors will be taken into consideration in determining the prevailing party, dating back to the creation of the agreement. One of the factors that could make a difference in this regard is having a notary public acknowledge the signatures on the contracts. While this is not required of all contracts, the extra step may be worth it in the long run.

Having a signature notarized is a way of guaranteeing that the person who signed the contract is who he or she says they are. There are two specific situations where this could be beneficial. One is where a party to a contract dispute claims that he or she never signed the document. Having the signature notarized immediately makes this argument difficult to prove.

A second reason is that if a notary makes a mistake regarding the signatures, the business may not be responsible for the business’ damages should that mistake result in a loss in the contract dispute. Instead the notary would be. This is because in most states notaries are required to be bonded by insurance companies.

Having signatures notarized may not make it possible to completely avoid contract disputes. It may however be one tactic to help reduce the number of disputes that do occur.

Source: Entrepreneur, “Avoiding Contract Disputes,” Chris Kelleher, Accessed Sept. 18, 2014

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