Contract Basics
The act of signing a contract to make it legally binding.
Execution is the point where a contract is signed and becomes binding. "To execute a contract" means to sign it, and a "fully executed" contract is one that every required party has signed. This is distinct from performing the contract, which is doing what the contract requires after it is signed.
For most business agreements today, execution happens with an electronic signature, which carries the same legal weight as ink under the ESIGN Act and UETA. The effective date may match the execution date or differ from it.
Related terms
A person who signs a contract, binding themselves or the organization they represent.
A digital way of signing a document that carries the same legal force as a handwritten signature.
The date a contract's obligations actually begin, which is not always the date it was signed.
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