Understanding Electronic Contracts for Business

In today’s world, electronic contracts have become essential in the business landscape. But what are they? Why are they becoming popular worldwide?

These are widely known for their easy-to-use, time-saving, affordability, and Many other reasons.

In this guide, we will explore the ins and outs of this contract and discuss the various types, pros, and cons of an e-contract. So, are you ready to find out? Let’s go!

What is an Electronic Contract?

An electronic business contract or an e-contract is an online agreement created and signed digitally. In addition, from signing the contract to executing it, people can perform these tasks effortlessly. Furthermore,  it’s best to operate the process through emails, online tools, and other reliable tools.

In simpler words, it’s just like a traditional agreement that requires every participant’s permission and obligations. Thus, the only difference is that the process is performed online.

How E-Contracts Work

Now, the most important question that arises that how an e-contract works. Well, here are the steps:

1. Drafting: The first step for creating an electronic contract is to make a draft. In addition, one has to use the right template and leverage all the policies, rules, and conditions of the contract.
2. Negotiation: It also has a system to negotiate and offer different terms and conditions. As a result, it increases the success rate of an e-contract.
3. Signing: Here comes the most important step, due to which an electronic contract is created. Yes, signing. In addition, it is performed through the electronic signature. Thus, with this step, the crucial step is completed.
4. Storage and share: Lastly, it’s time to keep it safe and confidential. So, it is often shared on official and reliable online tools or email.

What Impact Have Electronic Contracts Created

Gone are the days when traditional contracts were the only source of business commitment and deals. Now, e-contracts business have taken over.

Here are the two most important factors that were seen in the last two years:

• The electronic signature market reached $2.8 million in the year 2020. Additionally, in the period of five years, the global e-sign transactions increased from 89 million to 754 million (Source Clustdoc).
• Businesses save up to 55-78% of their overall cost through electronic contracts. Thus, it is a great way to cut down on extra costs.

Types of Electronic Contracts

Yes, several types of electronic contracts are built, and each of them plays a major role. Thus, depending on the platform and purpose, you may choose:

Click-wrap Agreement

We all have seen a click-wrap agreement online while browsing a website. Don’t remember? It’s a small box that shows “I agree” in the end. By tapping into that “I agree” bow, you are okay with their terms and conditions. Additionally, the check here is that these rules and regulations must be easy to understand.

Browsewrap Agreement

This type of electronic agreement is different from the click-wrap agreement. It means browsing the website and continuing to use it. As a result, it shows acceptance of their terms and conditions.

Sign-in Wrap Agreement

A contract that is between click-wrap and browsewrap is the sign-in wrap agreement. In such agreements, a user agrees to the terms and conditions by signing into the account and using the service.

How to Have Clients Sign Contracts Electronically

You must be wondering how a client can sign a contract digitally. Well, the answer is here!

Follow the given steps and ease the signing process:

1. Choose an e-sign business platform such as DocuSign, Adobe Acrobat Sign, HelloSign, or others.
2. Open the link, review it, and select to sign it digitally
3. Select the source name and pick a name.
4. Sign in and apply your digital signature.
5. Recheck the sign.
6. Send the signed business document.

Are Electronic Contracts Legally Binding?

Are e-contracts legal in the UK? A 100%!

Yes, electronic contracts are legally binding. It’s all because of the Electronic Signature in the Global and International Commerce Act (ESIGN Act) and UETA, as they collaboratively stipulate that e-signs are valid.

Moreover, the Unfair Contract Terms Act 1997 applies to any click-wrap terms and conditions, so any condition must be reasonable and fair, specifically those that limit the liability.

Important Note:

In today’s world, it’s vital to deal with electronic issues carefully and consideration of legalities. Therefore, pupils studying law have to deeply understand such topics. Also, they have to write academic content as well. I know it’s hard to understand such acts and amendments. Therefore, law students can also pay someone to write my law assignment. This way, you can understand and get a well-written law assignment in no time.

Pros and Cons of Electronic Contracts

The revolution of contracts in 2025 comes with both pros and cons. E-contract comes with ease of use, speed, and more. But at the same time, security is a big concern. Here’s a breakdown:

Pros

1. Speed and efficiency: Unlike traditional contracts, e-contracts are reviewed, signed, and stored much faster.
2. Cost-effective: Electronic contracts cut down all the expenses of printing, paper, and physical storage.
3. Improved security: These contracts incorporate security measures like two-factor authentication. Thus, it protects against tampering.
4. Audit trails: Several e-contract platforms offer audit trails. In addition, it documents all the actions which can be valuable in case of disputes.

Cons

1. Legal validity: In general, e-contracts are enforceable. However, some jurisdictions might have particular requirements or limitations regarding electronic signs.
2. Security concerns: Digital contracts are more likely to be exposed to cyberattacks and data breaches.
3. Technology: These contracts are merely created and executed digitally. Hence, any minor technological issues, such as system failure or software glitches, can create issues.
4. Digital divide: Not every individual has access to particular business electronic devices to sign such agreements. As a result, it can create barriers for the users.

Final Words

With the increasing growth in online businesses, electronic contracts have eased the business agreement-signing process for everyone.

It is completely like a traditional agreement, but the only difference is that it is done online. Thus, it works the same.

Also, there are numerous types of these contracts, including click-wrap, browsewrap, and sign-in agreements.

Another major concern arises: how can clients sign it electronically? Thus, that answer is also in this blog!

Oh wait, are these business contracts legal in the UK? Yes, they are! However, don’t forget to know the pros and cons of them.