Who should sign a contract first?

Does it matter legally who signs first?

No, it doesn't matter legally who signs a contract first. The order of signatures on a contract typically holds little legal significance in most scenarios, provided both parties have signed. A binding agreement hinges upon a shared understanding and acceptance of the terms a concept known as the "meeting of the minds." As long as this mutual consent is evident and the terms remain unchanged, the sequence of signatures is irrelevant to the agreement's validity.

Situations where signing first can be risky

While the order itself might not be legally problematic, signing a contract first can carry practical risks in certain specific situations, particularly when there are no specified timeframes, delivery dates, or exit clauses outlined in the agreement. This is sometimes referred to as being "locked in".

1. Empty contract or empty fields

Signing a document with blank sections opens the door for the other party to fill them in later with unfavorable terms.

2. Purchasing products

When dealing with a supplier notorious for delivery delays, signing after they return an approved contract protects you from being locked in while they delay the shipment, forcing you to seek alternatives.

3. Commiting to selling an asset

In this case, signing first could restrict your ability to negotiate better offers.

How to mitigate risk when signing a contract first

Even if signing first isn't ideal, these strategies can mitigate potential risks.

1. Try to have both parties sign immediately

Always favor an immediate signature by both parties when possible.

2. Include dates and timeframes

Specify deadlines for completing obligations and outline consequences for any delays.

3. Include an exit clause

Negotiate a favorable exit clause allowing you to withdraw under specific circumstances. This can act as a mechanism that protects you from being in a locked-in situation.

4. Never sign a contract with empty fields

Insist on completing all sections before signing.

5. Date your signature

Mark the date you signed to establish when your agreement took effect. This can help provide a track record in court in case of a dispute.

6. Keep an original copy

Maintain a signed copy of the agreement for your records. This copy helps you keep a record of the terms you have agreed to and mitigate the risk of the counterparty modifying the terms agreed upon.

Although the signing order itself doesn't hold legal weight, understanding the practical implications and utilizing the tips above empowers you to approach any agreement with confidence and clarity, ensuring a smooth journey from ink to execution.