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San Diego Business Law: When to Have Signatures Notarized
Sometimes, with particularly important contracts and agreements, it is useful and beneficial to ask that the signatures of the parties be notarized. If you have ever bought a house, then at some point during the transaction, you participated in the process of notarizing the deed (if you were the seller) or the mortgage/note documents (if you were the buyer). Aside from real estate and financial documents, other common examples of when notarization is beneficial or required include:
- Transfer of titles to automobiles, boats, and similar
- Powers of attorney
- Court documents
- Testamentary and marriage-related documents
- And more
Generally, notarization is done face-to-face in front of person who has been appointed as a “notary public.” Such appointments are governed by California statute. See Cal. Civil Code, §§ 1180 et seq.; Cal. Gov. Code, §§ 8200 et seq.
In California, notaries are confirming two facts – that the person signing the document is who they say they are, and that the person signing is not being compelled to sign (for example, no other person is standing there with a weapon or is moving the person’s hand as they sign, etc.). Notarization creates an evidentiary presumption that will be applied by California judges. The presumption is that the signature is a valid signature. See Cal. Evid. Code, §§ 1450 et seq. Notarization is a mechanism for combatting forged signatures. See our discussion here.
Importantly, a notary is not ensuring or verifying anything about the CONTENT of the document; merely the validity of the signature and the identity of the person signing. Indeed, notaries in California must put this disclaimer near their notary stamp:
“A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.”
Judges will give more importance — precedence — to a notarized signature than to other statements related to those signatures.
San Diego Corporate Law: When to Have Business Contracts Notarized
In general, business contracts do not need to be notarized unless there are circumstances inherent in the transaction that might lead one party or the other to be concerned about the identity and/or authority of the other party to enter into the transaction. As discussed above, notarization is about evidentiary proof used by judges in the event of litigation. Most business contracts are expected to move quickly; that is, upon execution, in general, the parties plan to move forward and complete their respective obligations. In general, if there is a breach of the contract, that will happen quickly. As such, proving the validity of the signatures can be done, if necessary. The individuals involved are likely to be alive and locatable. Plus, various actions — such as beginning performance — can obviate the need to prove that a signature is valid. A valid contract can be formed by conduct and by ratification. Thus, with most business contracts, there is rarely a need to prove that a signature is valid.
By contrast, one reason for notarizing deeds and documents related to land and real property is the fact that such documents might lay dormant in the county recorder’s office for decades. Courts need to be able to rely on vintage signatures even if those signing have passed away or cannot be located.
That being said, here are some circumstances in which notarization might be beneficial:
- Contracts that are signed remotely — that is, NOT signed during a face-to-face meeting where everyone is in the same room and can testify who signed what and when
- Contracts involving foreign businesses
- Contracts involving real estate
- Contracts involving assignments — ease of proof for third parties
- Contracts where performance may take years (and, as such, signatories and witnesses might be unavailable for future litigation)
Contact San Diego Corporate Law
For further information, please contact Michael Leonard, Esq. of San Diego Corporate Law. Mr. Leonard’s law practice is focused on business, transactional, and corporate matters, and proudly serves business owners in San Diego and the surrounding communities. Contact Mr. Leonard by email or by calling (858) 483-9200.
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