Many legal documents contain space for a ‘witness signature’. But, what exactly is a witness signature? Being aware of the legalities surrounding witnesses is crucial in ensuring that your contract is valid. However, some business contracts don’t require a witness signature. If you are contracting between two companies, you do not need to worry about witnesses as long as you properly execute your contract. This article will explain who a witness can be and when you will need one for your contract.

What is a Witness Signature?

A witness signature is exactly what it sounds like: the signature of someone who witnessed the person executing the legal document. So, for example, if you are signing up to a new lease, a person who watches you sign the document can indicate that they witnessed this by also signing the document.

Who Can Be a Witness?

For most cases, a witness is not required to have a particular title or status. However, there are exceptions to this.

For example, if the document is a statutory declaration, it needs to have an ‘authorised witness’. This might be, for example, a justice of the peace or a lawyer.

For documents that do not require an authorised witness, a witness ordinarily should:

  • be over 18 years of age;
  • be of sound mind;
  • not be under the influence of drugs or alcohol;
  • not be a party to the document or have any financial interests in the document; and
  • have known you for at least one year or have taken reasonable steps to verify your identity.

The witness does not need to understand the contents of the document that you are signing. Instead, their purpose in most cases is simply to witness that you have signed the document. In special circumstances, such as with statutory declarations or affidavits, the person may also need to administer an oath or affirmation. However, they will need to be authorised to do so.

Does My Legal Document Require a Witness?

Whether your legal document requires a witness depends on what type of document it is. Certain documents, such as deeds or wills, require a witness signature to be valid and enforceable. In some cases, such as with wills, the document will need two or more witnesses. Others, such as a simple contract, generally do not require a witness at all. However, it is always best practice to have one.

Does My Business Contract Need Witnesses?

Generally, a contract between businesses will not need a witness. However, having a witness can be a good idea to avoid any unnecessary disputes. Furthermore, witnessing can be especially important when you or the person you are contracting with is a sole trader.

Although there are always specific exceptions, there is no general requirement that a standard contract must have a witness. Instead, a contract will be binding at law if there has been:

  • an offer of terms that the other party has accepted;
  • an intention to create legal relations;
  • certainty of the essential terms; and 
  • an exchange of values between the parties (this is known as ‘consideration’). 

There is also the issue of capacity and competence. This means that a contract with a young child or someone with a mental disability may not be enforceable. 

However, all too frequently, disputes arise when one party claims that the contract is not valid. They may argue that:

  • it was not them who signed the contract;
  • the person who signed it did not have authority to sign on their behalf; or
  • they were intoxicated at the time that they signed it.

All of this may be false, of course. However, it may still mean that you are drawn into a potentially costly dispute. However, if a person witnessed the signature, that person can be called on to verify what happened.

Special Execution Rules

Witnessing is less of an issue when the contract is between companies, rather than between individuals. This is because companies have special execution rules where, if followed, bind a company to the contents of the contract.

Subsequently, it allows the other party to rely on the document. This is not to say that a company will not be bound if it does not follow these rules. It just means that, if faced with an allegation that the company is not bound, the other party can rely on the manner of execution to bind it. Therefore, a witness would serve no added benefit in these circumstances.

Key Takeaways

Ensuring that your contract has been properly witnessed is crucial in making sure that the validity of the contract cannot be disputed.

When choosing a witness, you must select someone who meets all the legal eligibility requirements. However, if your contract is between two companies, you might not need a witness at all. If you have any questions about contract witnesses, contact LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.

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