Is an electronic signature valid?

Yes. Under the ESIGN Act (15 U.S.C. §7001) and state UETA laws, electronic signatures are legally enforceable if the parties demonstrate intent, consent, attribution, and record retention.

Do I need a notary or witnesses?

Generally no for simple commercial initial agreements; specific transactions (real estate, powers of attorney, certain affidavits) may require notarization or witnesses under state law.

What if the signer uses a different name?

Mismatched names can create enforcement issues. Have signers include printed name and title, and attach identity documentation when authority is unclear.

How long should I retain the signed agreement?

Retain for the active term plus at least 3 years; follow IRS rules (IRC §6501(a)) and industry-specific retention such as HIPAA six-year rules (45 CFR §164.530(j)).

Can the agreement be amended electronically?

Yes. Amendments can be done electronically if all parties agree and sign the amendment using the same electronic signature standards to preserve enforceability.

Which authentication level is recommended?

For low-risk deals, email link or SMS code is common; for higher-risk or regulated data, use multi-factor authentication or stronger KBA to reduce fraud risk.

Electronic Signature
Templates
Miscellaneous
Business Initial Agreement

Business Initial Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS INITIAL AGREEMENT

This Business Initial Agreement ("Agreement") is made effective as of by and between:

Client Name Client Address Contractor Name Contractor Address

RECITALS

WHEREAS, Client desires to engage Contractor to perform certain professional services in connection with Client's business operations; and

WHEREAS, Contractor represents that Contractor has the skill, experience, and qualifications necessary to perform such services and is willing to perform those services under the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

SCOPE OF WORK

Contractor shall perform the services described below in accordance with professional standards and the schedule set by the parties. Services shall include the following:

Describe Scope of Work

PAYMENT TERMS

Client shall pay Contractor for services rendered in accordance with the following terms:

Total Payment Amount Payment Schedule Accepted Payment Method(s) Late Payment Fee

All payments are due within the payment schedule above. If Client fails to pay any undisputed amount when due, Contractor may suspend performance after providing ten (10) days' written notice. Client shall reimburse Contractor for reasonable costs of collection, including attorneys' fees, if any undisputed amount remains unpaid following thirty (30) days after written demand.

TERM AND TERMINATION

The term of this Agreement shall commence on the Effective Date and shall continue until the completion of the Scope of Work unless earlier terminated in accordance with this Agreement.

Start Date Estimated End Date Notice Period for Termination

Either party may terminate this Agreement for material breach by the other party if the breaching party fails to cure such breach within the notice period above. Termination shall not relieve Client of the obligation to pay for services performed and expenses incurred through the effective date of termination.

CONFIDENTIALITY

Each party acknowledges that it may receive confidential or proprietary information of the other party. Recipient shall (a) hold all such information in strict confidence, (b) not disclose such information to any third party except as required to perform its obligations under this Agreement, and (c) use such information solely for the purposes of performing under this Agreement. Confidential information does not include information that: (i) is or becomes publicly available through no wrongful act of Recipient; (ii) was known to Recipient prior to disclosure by Discloser; (iii) is rightfully obtained from a third party without breach of any obligation of confidentiality; or (iv) is independently developed without use of Discloser's confidential information.

Upon termination or expiration of this Agreement, Recipient shall promptly return or destroy all copies of Discloser's confidential information and certify in writing that it has done so, except to the extent retention is required by law, regulation, or bona fide internal record retention policies.

LIMITATION OF LIABILITY

Except for liability arising from gross negligence or willful misconduct, in no event shall either party be liable for consequential, incidental, special, or punitive damages. The aggregate liability of either party under this Agreement shall not exceed the total fees paid by Client to Contractor under this Agreement in the six (6) month period preceding the claim.

INDEPENDENT CONTRACTOR; TAXES

Contractor shall perform services as an independent contractor and not as an employee or agent of Client. Contractor is solely responsible for payment of all federal, state, and local taxes arising from compensation paid under this Agreement and shall obtain and maintain all insurance required by law.

GOVERNING LAW

Governing State

This Agreement shall be governed by and construed in accordance with the laws of the state specified above, without regard to its conflicts of laws principles.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, and communications, whether oral or written. Any amendment or modification of this Agreement must be in writing and signed by both parties.

MISCELLANEOUS

If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. The parties agree to execute such further documents and take such further actions as may be necessary to carry out the intent of this Agreement.

Agreement Notes (optional)

Client:

By:

Date:

Contractor:

By:

Date:

What the Business Initial Agreement Is

A Business Initial Agreement is a short-form contract used to record preliminary terms between two parties before a full contract is negotiated or executed. It typically identifies the parties, the basic scope of the proposed relationship, key dates, any initial payment or deposit, and which jurisdiction will govern disputes. While concise, it creates actionable obligations and can be binding if executed with intent to sign and retained according to electronic signature rules under ESIGN and state law.

Why Use a Business Initial Agreement

Using a Business Initial Agreement clarifies expectations early, preserves bargaining positions, and documents agreed preliminary terms. It reduces ambiguity during negotiation, helps prioritize deliverables, and creates a written record useful for audits and dispute prevention.

Who Typically Completes This Agreement

The Business Initial Agreement is used by organizations and individuals who need to record early-stage commitments without a full contract in place.

Small business owners confirming initial project scope and payment terms
Procurement or purchasing teams documenting a supplier onboarding intent
Independent contractors or consultants recording an initial engagement outline

It is suited to buyers, sellers, vendors, service providers, and internal teams that require a concise written acknowledgment of initial commercial terms before final documentation.

Step-by-step: Completing the Business Initial Agreement

Follow a clear, consistent sequence to complete the agreement and reduce rework: collect party details, define scope, set dates and payment, confirm governing law, and obtain signatures from authorized parties.

01

Collect party details: Enter full legal names, addresses, and contact information for each party.
02

Define scope: Describe the initial deliverables, services, or goods in clear, measurable terms.
03

Set dates and payment: Specify effective date, milestones, payment amount, and currency.
04

Sign and retain: Obtain signatures, date them, and store copies per retention rules.

How to Configure an Online Workflow

Set up a signing workflow that matches your approval process: define signer order, authentication, and post-signature distribution rules.

Field	Configuration
Signing order	Sequential or parallel signer routing based on approval hierarchy
Authentication	Email link, SMS code, or KBA as required by risk level
Notifications	Automatic email confirmations and reminders to signers
Storage	Save signed copies to cloud storage or local archive

Technical Considerations for eSigning and Distribution

Choose a platform that supports your authentication, retention, and integration needs while meeting legal requirements under ESIGN and UETA.

Integrations: Salesforce, Microsoft 365, NetSuite connectivity
Document formats: PDF, Word DOCX, HTML support
Security: TLS 1.2/1.3 and AES-256 at rest

Typical eSigning Flow for a Business Initial Agreement

A standard online signing flow moves the document from sender to signer with field placement, authentication, signing, and automated recordkeeping.

Upload document: Sender uploads the agreement to the chosen eSignature platform.
Place fields: Add signature, date, and initial fields where required.
Send to signer: Dispatch via email link or direct invite with authentication.
Capture audit trail: System records timestamps, IP, and signer actions for evidence.

Essential Elements to Include in a Professional Agreement

A clear Business Initial Agreement reduces ambiguity. Include essential clauses that define obligations, timelines, payment, and remedies to make the preliminary terms enforceable.

Parties

Identify each contracting entity by full legal name, business type, and principal address to ensure correct legal attribution and avoid identity disputes.

Scope

Describe the initial services, deliverables, or goods with measurable criteria, acceptance tests, and any exclusions to limit misunderstanding during later contracting.

Term

State the effective date, any milestone dates, and the duration of the initial arrangement or period before a full contract is expected.

Payment

Specify amounts, due dates, payment method, currency, and whether payments are deposits, retainers, or non-refundable to prevent billing disputes.

Confidentiality

Include brief non-disclosure language if proprietary information is shared; note whether a separate NDA will follow or apply concurrently.

Termination

Outline how either party can withdraw from the preliminary agreement and consequences for deposits, work-in-progress, or early termination.

Security and Compliance Essentials to Note

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit Trail: Timestamp, IP address, and action log

Authentication: Email, SMS code, or multi-factor options

HIPAA: BAA available for protected health data

21 CFR Part 11: Compliance options for FDA-regulated records

Certifications: SOC 2 Type II, ISO 27001, PCI DSS

Common Preparation Mistakes to Avoid

Using informal or inconsistent party names that later complicate enforcement
Failing to specify effective dates or deadlines, creating timing disputes
Leaving payment terms vague without amounts or currency
Omitting authorized signer names and titles for signature authority

Risks and Penalties from Incorrect or Missing Information

Tax reporting risk: $60–$330 per form (IRC §6721)

I-9 violations: $281–$2,789 per violation (8 CFR §274a.2)

Contract unenforceable: Ambiguous parties/dates can void obligations

HIPAA exposure: Improper handling can trigger 45 CFR penalties

Notary/witness error: Missing notarization may delay record acceptance

Backup withholding: 24% withholding for missing/incorrect TIN

Typical Deadlines and Timing Expectations

Certain tax and employment records have statutory deadlines; meet those timelines and retain supporting agreements for required periods.

Provide W-9 on request:

No fixed deadline; deliver to payor promptly to avoid backup withholding

1099-NEC to recipient:

January 31 each year for nonemployee compensation reporting

1099-MISC to IRS (paper):

February 28 for paper filings; March 31 if electronic

Form 1040 individual deadline:

April 15 with extension options using Form 4868

I-9 retention:

Retain for 3 years after hire or 1 year after termination

eSignature Vendor Comparison for Executing Business Initial Agreements

Compare basic pricing and core capabilities across vendors when selecting an eSignature platform to execute signed Business Initial Agreements securely and compliantly.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Real-world Examples of Use

Practical examples show how organizations use a concise initial agreement to accelerate onboarding and document preliminary commercial terms.

Optica Ventures LLC — COO

Optica used an initial agreement to document launch milestones and deposit terms before final contracts were negotiated.

Outcome: streamlined seller onboarding and faster resource allocation.
The concise format provided enforceable interim terms while legal drafted the comprehensive agreement, reducing operational delays and clarifying payment timing.

Martin Properties — Founder

Martin Properties used the form to record tenant move-in date and first-month rent prior to lease finalization.

Outcome: reduced occupancy gaps.
The signed initial agreement preserved the reservation of the unit, established the deposit schedule, and allowed property managers to begin preparations without a full lease.

Practical Tips to Improve Accuracy and Speed

Adopt consistent templates and review checkpoints to reduce negotiation friction and post-signature disputes.

Standardize your template

Use a single vetted template across the organization to maintain consistent language, reduce review cycles, and ensure required clauses are present.

Verify signer authority

Confirm signatory titles and authority in advance; request a board resolution or power of attorney when dealing with corporations or unusual structures.

Capture consent to e-sign

Include a short consent clause permitting electronic signatures and note the method used to authenticate the signer for evidentiary strength.

Archive signed copies securely

Store signed agreements with audit trails in a secure, access-controlled repository and maintain retention schedules consistent with legal requirements.

Who Can Sign on Behalf of a Business

Authorized Signer — CEO

The CEO typically has implied authority to bind the company on preliminary agreements; confirm internal delegations and corporate bylaws before accepting signatures.

Contract Administrator — Procurement Manager

Procurement or contract managers may sign when empowered by an internal delegation of authority; obtain written delegation documentation to avoid later ratification issues.

Frequently Asked Questions About the Business Initial Agreement

Answers to common questions address enforceability, signature methods, retention, and authentication to help practitioners avoid routine errors.

Need help? Contact support

Is an electronic signature valid?
Yes. Under the ESIGN Act (15 U.S.C. §7001) and state UETA laws, electronic signatures are legally enforceable if the parties demonstrate intent, consent, attribution, and record retention.
Do I need a notary or witnesses?
Generally no for simple commercial initial agreements; specific transactions (real estate, powers of attorney, certain affidavits) may require notarization or witnesses under state law.
What if the signer uses a different name?
Mismatched names can create enforcement issues. Have signers include printed name and title, and attach identity documentation when authority is unclear.
How long should I retain the signed agreement?
Retain for the active term plus at least 3 years; follow IRS rules (IRC §6501(a)) and industry-specific retention such as HIPAA six-year rules (45 CFR §164.530(j)).
Can the agreement be amended electronically?
Yes. Amendments can be done electronically if all parties agree and sign the amendment using the same electronic signature standards to preserve enforceability.
Which authentication level is recommended?
For low-risk deals, email link or SMS code is common; for higher-risk or regulated data, use multi-factor authentication or stronger KBA to reduce fraud risk.

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