• Pricing
  1. Home
  2. eSign PDF
  3. The Business Blog
  4. What You Need To Know About Working With Digital Contracts
220803 IT WorkingWithDigitalContracts

What You Need To Know About Working With Digital Contracts

by Olivia Baker

Check out our take on everything you should know before working with digital contracts to set yourself up for success!

With the rise in digital transformation both in the workplace and in our private lives, you’ve probably already come across digital contracts. If not, you likely will soon! But what are digital contracts and what do you need to know to work with them? Let’s dive in!

What Are Digital Contracts?


As the name suggests, digital contracts are electronic agreements that comprise the same information as traditional paper contracts, such as parties involved, terms of the contract, and signatures that act as an agreement to these terms. Digital contracts can be used in place of paper agreements and there are many benefits to using them, which is why so many businesses, contractors, and individuals are moving towards digital contracts.

Benefits of Digital Contracts


Fast Processing


Digital contracts can be created and processed much faster than paper contracts, which need to be printed, shared, signed, and scanned. All you have to do is type up the agreement and upload the document to an electronic signature tool to send for signing. In fact, you can save up to 5 days’ turnaround time by opting for electronic contracts over paper contracts.

Ease of Use


Digital contracts are also more accessible, because they can be stored on the cloud or in shared folders instead of being filed away in an office cabinet. This can be useful for team members and the contract creator if there are any suggestions or edits. Digital contracts also allow for easy communication between parties—rather than meeting in person or having to email back and forth about any discrepancies or confusion over the agreement, both parties can annotate digital contracts directly on the file.

Cost Effective


With printing and posting, paper contracts can become pretty costly by the end of the process, especially with larger, more complex agreements that need to be shared among many parties that all need their own copy. The only cost associated with digital contracts is a document management tool—like Smallpdf.



You can have a lot more control over who has access to the agreement when you opt for digital contracts compared to paper, which needs to pass through many hands to get from A to B. They can be sent directly from one individual to another through secure tools to ensure only the intended recipient can view or edit.

Not sure what to look for when choosing a secure and trustworthy contract management tool? Check out our Guide to Choosing the Right PDF & E-Signing Software for Your Business.

Are Digital Contracts Legally Binding?


In most cases, digital contracts are just as valid as their paper counterparts! Thanks to a variety of electronic signature acts around the world, if both parties are happy with processing and signing the agreement electronically, the contract is generally enforceable by law.

Signing a Digital Contract


There are two types of e-signatures: electronic and digital. But what’s the difference between them and which one do you need to sign your digital contract?

Electronic signatures could be a scan of your wet signature, or a signature created on an electronic signature tool that’s been placed on your digital contract as an image—no frills or extra information hidden beneath it.

A digital signature can be created in the same way, but offers more security. Digital signatures create a cryptographic fingerprint that’s unique for each signee, and contain a Long Term Validation (LTV) timestamp. These features are used to authenticate signees, as well as protect your contract and signature from being tampered with.

Both electronic and digital signatures are widely accepted, so the one you use will probably depend on your own preference or the type of contract. Different countries—and even states—have different regulations, so we encourage you to check in with your local e-signature laws to be on the safe side!

Head to Smallpdf eSign for free electronic signatures or get your hands on a free 7-day trial to Smallpdf Pro for digital signatures and a bunch of other nifty features!

Olivia Baker
Olivia Baker
Content Writer