How long should you take to sign a contract?
The amount of time it takes to approve a contract depends on a number of factors. Complex agreements require more time to sign than straightforward ones. If all parties agree to the terms of a contract, there is usually no reason to postpone signing.
The following principles apply in most cases:
- There is no “set time” that a contract should take to sign.
- Signing time will often depend on the type of contract. A contract covering the sale of a house, for example, will take much longer to approve than a small loan agreement.
- As long as both parties agree to the terms of a contract, there is no reason why it shouldn’t be signed as quickly as possible.
Let’s take a look at some of these points in more detail.
What is mutual assent?
“Mutual assent” is a legal term that describes an agreement between two parties to abide to a set of terms contained within a contract. For a contract to be legally binding, both parties must agree to all conditions.
If a contract is altered after an individual or entity has provided their signature, it is automatically made void.
Mutual assent links directly to the question “How long should you take to sign a contract?” As long as all parties involved agree to the contents of a contract, there is no reason why it should not be signed immediately.
However, when it comes to creating and reviewing contracts (as opposed to signing), there can be significant time differences depending on the length, scope, and purpose of the document in question.
Types of contracts and signing times
Signing time varies between contracts. Here are several common contract types, with some loose pointers about how long the signing process takes.
1. Loan agreement
A loan agreement stipulates the conditions of a loan between a lender and a borrower, including the amount borrowed, repayment terms, and penalties. Loan agreements tend to be straightforward documents and, as such, are usually approved quickly.
Loan agreements take anywhere from one or two hours to several weeks to approve.
2. Business proposal
Business proposals outline the scope, timeframe, and deliverables of a project. They are detailed documents and can take several weeks to put together.
For example, most business proposal templates included in the PandaDoc templates library have multiple in-depth sections. Clients will usually need to review a proposal fully before signing.
Business proposals usually take several weeks to sign. Smaller proposals may be approved more quickly.
3. Sales contract
Sales agreements cover the terms of sale of a product or service. They explicitly state a transfer of ownership along with supplementary clauses.
Sales of large items, such as a house or business, take much longer, and require more signatures, than sales of small items or recurring business supplies.
Large contracts are usually reviewed by multiple individuals within an organization and so may take several weeks or months to approve. Smaller sales can be signed off in days.
4. Non-disclosure agreement
A non-disclosure agreement specifies how sensitive information, particularly “trade secrets,” can be shared between third parties.
Employees are often required to sign a non-disclosure agreement when they start working for a new company.
Non-disclosure agreements are usually approved over the course of several days before an employee starts working for a new company.
What are the stages of the signing process?
The signing process makes up one part of the broader contract creation and review process. The time it takes to review, edit and verify a document affects when approval takes place.
Here is an overview of the signing process:
1. Contract drafting
The drafting process is the stage in which a contract is written.
One party will usually take the lead on this. For example, in the case of a business proposal, the seller will be responsible for putting together the bulk of a contract.
2. Legal review
After a contract has been finished, it will be reviewed and modified by an organization’s legal team.
3. Signing
After legal review, the finished document is sent to the recipient for signing. In this stage, the recipient may ask for changes to the contract.
This is typically the reason that final approval is delayed.
4. Renewal
Long-term agreements may need to be renewed after a certain period.
Streamline the signing process with PandaDoc
PandaDoc provides a suite of document management tools that streamline the whole process of creating and approving business documents.
PandaDoc users have access to an extensive library of pre-written templates for drafting tailored, in-depth contracts. Easy-to-use electronic signature features also make it possible to sign documents in seconds.
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