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Non-binding contracts are typically used when two parties want to put down preliminary discussions on paper to make sure they're on the same page, but don't want to explicitly agree to anything yet. A letter of intent is a good example of a non-binding contract.

Does a contract always need to be signed? Yes, a contract does need to be signed to become a valid contract. There are occasional cases where oral contracts or unsigned contracts may still comply with contract law, but those are risky.

Verbal Contracts: No Signature Required If you make an agreement with someone that has all the elements of a contract (offer, acceptance, consideration, and intention), you are both competent to do so, and the contract is for less than $500, you often do not need a written contract.

Capacity: For the signature to be valid, the signee must be of legal age and able to give full consent. Intention to be legally bound: All parties must freely and willingly agree to the legal enforceability of the contract.

How to Properly Sign a Contract So It Will Be Enforceable Make Sure the Contract You're Signing Is the Contract You Agreed to Sign. ... Date the Contract. ... Make Sure Both Parties Sign the Contract. ... Make Sure Any Last Minute Changes to the Contract Are Initialed. ... The Parties Must Sign the Contract in Their Correct Capacity.

This is most often accomplished by having both parties sign the contract ? either electronically or via a handwritten signature. However, a signature isn't always required to make a contract legally enforceable. Verbal agreements can be considered legally binding, though they can be difficult to prove.

Lack of Legal Enforceability: Unsigned contracts and agreements are not legally binding. This means that parties may not be able to enforce the terms and conditions stated in the contract. This also is an indication that there was no agreement between the parties.