Does a Contract Have to Be Notarized? The Basics of Notarization

What’s a Notarized Contract?

A notarized contract means that the document has been signed in the presence of a qualified notary public, who then certifies the identity of the signatories. A notary public is an official position, similar to a real estate agent or a fire chief. Furthermore, notarization is a service that can be provided by the notary public or their designate (often a small business or other issuer of certifications, such as for vehicle licensing).
The requirements for becoming a notary public vary by state. While each state typically has an application process and requires a fee, most do not have many other prerequisites. The primary purpose of having a notary public present for the signing of a contract is to vouch for the identification of the people involved. If a notary public is not explicitly required , it can help to have them present as a disinterested third party.
A notarized contract is essentially a contract that has been witnessed by a certified third party. Because a notarized contract has had this additional step, its authenticity is more readily accepted in court as evidence if a dispute arises. However, even if you do not have a notary public available and your written contract is not technically a notarized one, this does not necessarily affect the validity of your contract.
As mentioned earlier, notarization is useful but may not be required for every contract. For example, if you are selling a car to a friend, you probably do not need it to be notarized. On the other hand, if you were to sell a house to a stranger, you probably would require notarization in order to feel comfortable exiting the transaction. For that reason, for real estate transfers and other property transfers, notarization is often required.

The Legalities of Notarizing Contracts

A common misunderstanding is that the law requires every contract to be notarized. In fact, only certain contracts must be notarized in order to be enforceable. Notarization is usually not a requirement for a contract to be valid; however, notarization can provide an extra layer of security.
Under California Civil Code section 1180, several types of contracts require notarization; these include contracts that relate to: The failure to notarize a contract of this type gives the other party a defense against the contract. If these contracts are not notarized, the other party may argue that the contract is void due to California’s Statute of Frauds. Essentially, the requirement of notarization under these circumstances is intended to ensure the party who is bound cannot later claim it did not understand the contract or that it was coerced into signing it. Having a notary witness the signing of a contract is not mandatory but can be useful to prevent such defenses.
Courts do have the discretion to enforce contracts that lack a notary, which means that a court could enforce a contract without a notary if doing so serves the interests of justice. For instance, if enforcing the contract despite the lack of notarization would avoid an unjust financial loss to one of the parties, a judge may allow it.
Notarization also may be expressly required by the parties signing the contract. Many agreements use this as a way to avoid disputes over the authenticity of signatures on the contract. If a document must be filed with the court following signing (as is typical in family law matters), a notary will often be required to verify the signatures on the agreement.

What Types of Contracts Must Be Notarized?

A few types of contracts commonly require notarization. Some of the most notable include:
Real Estate Transactions
The most commonly notarized documents are real estate conveyance documents, as notarization is a state law requirement. To protect both you and the lender, home sales must occur "in writing, signed, notarized, and sealed" with satisfactory verification of identity by an approved notary public to be valid.
During the real estate closing process, ask your lender’s home loan officer whether you need to get a notary. From this point, you can either research notaries near you, or ask the mortgage company if they work with traveling notaries who will come directly to you for a fee (this can save a lot of time).
Power of Attorney
When you need to give someone else the authority to act on your behalf, you’ll apply for what’s called a "power of attorney." This is a shorthand term for a power of attorney to act in a variety of matters, from business to medical to financial. When you do this, you’ll sign a notarized document giving the other person the legal right to act on your behalf.
This document will also need to be verified by the bank or relevant organization with signature matching, since a power of attorney may be used to access confidential personal information, including medical records, bank accounts, and other highly guarded documents.
Estate Planning Documents
If you are planning your estate, you will need a variety of notarized documents, including but not limited to:
You may have to pay special fees to a notary public so they can execute these documents for you.

Why Notarize a Contract?

Having a notarized contract can have many benefits. For example, notarizing a contract reduces the possibility of fraud or impersonation. Notaries are experts in identifying signs of fraud. Contracts signed in front of a notary public also protect you from someone denying that they signed the contract or the contents of the contract are different. The notarization process helps make sure that the proper procedures were followed in signing a contract.
A notarized contract can also be more beneficial as evidence in court. It is more difficult for an opposing party to claim that a contract had not been signed or submitted into evidence without it being notarized. A notarized contract is usually stronger evidence in court than an unnotarized contract. Also, having a contract notarized may help make sure that it sticks. Courts in the United States recognize that signatures are either primary or secondary. Primary signatures are the ones you write for yourself. Secondary signatures are those that are actually considered an avoidance of responsibility. Therefore, having a contract notarized will most likely make it primary evidence.

How To Notarize a Contract

Below are the steps involved in the notarization process for contracts, things you need to bring with you and some common challenges that can arise:
Parties involved. The person signing the contract (the signer) is the individual whose identity is verified by the notary during the signing procedure. The signer must be physically present at the time of notarization. If the signer has a different address, the contract should contain a line reflecting that. If a signer cannot be physically present, the notary may be able to perform a remote notarization if such option is permitted. Remote notarizations typically require use of video and audio communications technology and electronic signatures. Lastly, a person authorized by the company may also sign and have documents notarized on behalf of the company.
Documents Signer Should Bring to Notary. The signer must have a government issued photo ID , such as a passport or driver’s license. The ID must be current and not expired. A certified copy of the document that requires notarization should be brought by the signer. The contract should be typed. The signer may be asked to provide a statement that the company has a policy to notarize documents for its own purposes only and not for any third party. This is a common requirement of notaries to ensure the legality of the notarization. The contract should not be signed prior to the notarization.
Exceptions. No contract is perfect and some companies have different policies about what they do and do not allow.
Examples of exceptions:
Exceptions can cause confusion and break a contract. It is important to document all the terms of the contract in writing. When not in compliance with these certain requirements for notarization, it does not invalidate the contract but the signer may incur additional costs. It is also possible that the contract may be rejected by the contract party when presented later. When the parties are in doubt, they should consult a lawyer.

Alternatives to Notarization

Alternatives to Notarization of a Contract
A notary public plays the role of an impartial witness in the execution of certain documents. The notary must first ensure that the parties who are signing the document are who they say they are, and then confirm that each party has been given the chance to review the document to make sure that it is correct prior to the execution of the document. However, if a notary is not available, or if the parties prefer that the document be executed without a notary, there are a number of other ways to create a valid contract. One option is to execute a document in front of witnesses rather than a notary. Depending on the type of contract in question, a contract signed in front of one or more witnesses will be legally enforceable so long as the elements of a contract are met (offer, acceptance, exchange of consideration and mutual assent). This is generally true for the majority of contracts; however, there are certain exceptions. A contract must be signed in front of a notary to be valid when required by law, or if the parties state that signing it in front of a notary is a condition precedent to the contract’s enforceability. Contracts must always be signed in front of a notary public when a contract is signed in order to be recorded with the land records, such as deeds, mortgages, leases, and releases, among others. Other occasions when a notarization may not be required and the contract can be properly executed in front of a witness, are when the contract is not being entered into to satisfy any legal requirement, such as when a parent simply wishes to give their house to their child without a deed.

Misunderstandings Concerning Notarized Contracts

There are several common misconceptions surrounding notarized contracts. Let’s walk through a few of the most prevalent:
Myth: Contracts must be notarized to be legally binding.
Fact: As long as all necessary elements of a contract exist, it is legally binding, even without notarization.
The Essentials of a Legally Binding Contract
For a contract to be legally binding, it must fulfill the following criteria:
• Must contain an offer and acceptance
• Must contain a lawful object
• Must involve consideration
• Must be between competent parties
• Must not be for an illegal act
A notarization is not a requirement for any of these elements of a legally binding contract. Even those who make the argument that a notarization is necessary for a contract to be legally binding typically refer to laws regarding the enforcement of real estate contracts — which is a much different matter than notarization. In the interest of ensuring that a contract is enforceable, a real estate contract may be held to a higher standard than another type of agreement, requiring a signature "in the presence of" the other party or in the presence of a notary.
Myth: Any law firm or attorney can provide notarized contracts.
Fact: Though many law firms can provide notary services, it is not universal. While some attorneys at your firm do not yet hold notary certifications, it is likely that notaries can be found in your office. You should be able to create secured and notarized contracts from the comfort of your office.

FAQ On Notarizing Contracts

How much does it cost to notarize a contract?
A basic notarization by an independent notary costs approximately $10.00.
Where can I notarize a contract?
Most banks provide notary services for free, as long as you are a customer . Other areas to obtain notarization are AAA and your local courthouse.
How long does it take to notarize a contract?
Just a couple of minutes.