How do you draft an online or digital contract?

Working With Digital Contracts: Everything You Need to Know

If you hadn’t gone digital in your business dealings prior to 2020, you’re probably operating at least 80% digitally now. The COVID-19 pandemic has forced businesses to learn how to operate virtually, and technology has risen to the occasion. 

Digital business technology has been here all along, but many businesses hadn’t begun utilizing everything that was available until this year when they essentially had to. One element of business that many companies have recently begun adopting into daily practice is the use of digital contracts for new business ventures.

If you’ve been sitting on contracts and agreements that need to be drafted, waiting for the time when you can sit down face to face with your client for collaboration and signature, you should know you’ve got options. Using digital contracts, like the ones you can create with Revv, can help you get back to business and get contracts drafted, reviewed, approved, and signed, all without ever printing a single piece of paper or meeting with anyone in person. 

If you’re a bit skeptical, we understand. Even though the use of electronic documents and signatures has been legal and valid since the early 2000s, the transition to purely virtual business has taken time. The COVID-19 pandemic has escalated the transition and left some feeling as though they’re struggling to catch up. 

You don’t have to feel lost in the world of virtual technology. Revv can help you understand digital contracts and can help you through the entire digital contract process, start to finish. Let’s talk about what a digital contract actually is, what makes them legal, and how Revv can help you along the way. 

What is a contract?

A contract is an agreement between two parties for mutual benefit and performance that is enforceable by law. Most of the time, you’ll find a contract in a form that has an outline that:

  • Defines the parties of the contract
  • Provides the parties’ contact information
  • Defines terms of the contract
  • Provides for terms of performance and obligation
  • Contains signatures

A digital contract is simply an electronic form of a contractual agreement. While a digital contract can be printed on paper and signed with ink, the use of electronic signatures means that never has to happen. 

Digital contracts are beneficial because they’re:

  • Easy to use. Instead of using word processing software, you can use digital contract software, like the kind offered by Revv, to easily create professional contracts easily and rapidly.
  • Fast. You can save time by using digital contracts by sending the contract both in-house and out of house in a digital manner. Instead of coordinating schedules and attempting to meet in person, you can easily send drafts electronically for review and signature.
  • Cost-effective. You’ll save money by using a digital system of contract drafting and signing. For instance, Revv’s pricing plans have generous allowances for users accessing the platform, so you’ll never have to worry about buying additional licensing for your software if your company grows.

This is all great, but are digital contracts legal? Good question; let’s explore.

Are digital contracts legal?

The Information Technology Act of 2000 made the use of digital contracts legal, valid, and enforceable by law. You can use digital contracts in confidence, knowing that if a portion of the contractual obligation is not met, specific performance can be sought. 

For a digital contract to be valid, it must not only contain the basic requirements that make a non-digital contract legal, but they must also be electronically signed in a manner consistent with governing law as provided by the E-Sign Act. Electronic signatures are valid if they:

  • Have proper consent. The party signing digitally must consent to signing digitally and be made aware of what their consent covers, what documents are included in their consent, and how they can withdraw their consent.
  • Make the signer aware of the hardware and software requirements necessary for signing electronically. The signer must verify they are able to sign electronically and get access to the hardware and software necessary to do so.
  • Are kept for the length of time required by law. For an electronic signature to be valid, the party requesting the signature must agree to keep the electronically signed document for the period of time required by law. 

In terms of having a legally binding digital contract, those are the basics. So what must the contract have to make it valid (whether or not it is digital)?

What are the six basic requirements for a contract?

For any contract, digital or paper, to be valid, six requirements must be met. While we will discuss them here briefly, you can find a more detailed explanation of these requirements, including how Revv helps ensure you meet them each time you create a new contract, in this article.

  1. Offer. Every contract will have an offer. This is essentially the basis of the contract that explains what Party A wants, and how Party B will fulfill the need. This will include the basic terms of the contract that each party will accept. 
  1. Acceptance. This is the portion of a contract that determines whether both parties have agreed to the terms of the offer. There is normally a time frame within which the offer must be accepted. 
  1. Consideration. This is the “payment” portion of the contract. Party A desires something from Party B, so Party B will provide that good or service for certain consideration from Party A, which is usually a monetary amount. 
  1. Legality. This ensures a contract is legally binding. This is subject to local jurisdiction, where a contractual obligation will be met. 
  1. Capacity. Both parties signing a contract must have adequate capacity to do so and cannot be in a position that renders them unable to sign a contract without understanding or under duress. 
  1. Mutuality. This term means that both parties understand what they are agreeing to, and both parties are in agreement that no misrepresentations have been made by either party. In other words, both parties completely understand the terms of the agreement. This may also be referred to as mutual consent. 

As long as a contract contains these six elements, it is a legally enforceable agreement. All contracts do have some clauses that cannot be skipped. Read this blog to remove your fear of understanding contractual clauses. However, when working with digital contracts, there are some practices you’ll want to avoid completely. 

Digital contract don’ts

It goes without saying that there are always rules to abide by for everyone’s protection. As such, there are some considerations you should make when working with digital contracts.

  • Don’t “click sign” too quickly. When you’re working with a digital contract, it can be easy to simply click through the electronic signature boxes. This is a bad mistake, as items in the contract could have changed since the last time you viewed it. It is always a good idea to verify any changes and to read before you sign.
  • Don’t assume that verbal or e-mail requests for contractual verbiage changes actually made it into the digital contract before you signed. A great way to avoid this is to limit direct changes and use comments and notes (that are preserved) to direct changes for the author.  
  • Don’t allow anyone else to sign for you without proper consent. It can be tempting to let a trusted friend or family member electronically sign something in your place if you aren’t able to get to a computer right away. Not only is this illegal if they don’t have consent, but they could also end up signing something you haven’t actually agreed to, which could turn out really horribly in the end. 

It’s easy to avoid these pitfalls when you use an intelligent business partner, like Revv, to help you navigate the creation and execution of your digital contracts.

How Revv can help you create digital contracts

Revv is your all-in-one document automation solution that allows you to create professional, legal contracts from start to finish. We make it easy and affordable to move forward in virtual business and e-commerce by supplying you with customizable document templates and easy drag and drop technology so you can create the exact document you need in as little time as possible. 

You can get your documents electronically reviewed, approved, and even signed in rapid time using our approval workflow options and eSign technology. Additionally, your entire team can collaborate on documents in one fluid workspace, no matter where they are.

Revv is a cost-effective option with generous pricing plans. It requires little or no training and helps your team create digital contracts quickly and efficiently. Using digital contracts is easy and effective when you work with Revv.

Try yourself! Sign up for free.


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Sameer’s decision of running his own startup is rooted in his experience at a semiconductor startup in the US some 20 years back. In addition to being an engineer, he is an MBA grad from Smith’s School of Business, Queen’s University, Canada. He has worked in product and product marketing roles throughout his career with Yahoo, Nokia, and Freshworks. In his everyday conversations, he can often be heard sliding pop culture and superhero analogies.

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