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Election Agreement

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ELECTION AGREEMENT

This Election Agreement (the "Agreement") is made and entered into as of by and between Party A: , whose principal place of business is ; and Party B: , whose principal place of business is (each a "Party" and collectively the "Parties").

RECITALS

WHEREAS, the Parties are parties to certain agreements and transactions involving the subject matter described below and desire to make and record a binding election as set forth in this Agreement;

WHEREAS, the Parties desire to set forth the terms, procedures and responsibilities relating to the election to be made, including the timing of the election, the party responsible for filing any required documentation, and the allocation of liabilities and indemnities arising from such election;

WHEREAS, the Parties intend that the election set forth herein will be legally binding upon the Parties, enforceable in accordance with its terms, and effective as of the Effective Date specified above.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1. Defined Terms. For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Election" means the election described in Section 2 below to be made by or on behalf of the Electing Party as to the treatment of the Subject Matter.

"Subject Matter" means the property, interests or transactions to which the Election relates, as described in the Schedule of Subject Matter attached hereto and incorporated herein by reference. Brief description:

2. ELECTION

2.1. Election Made. Subject to the terms and conditions of this Agreement, the Parties agree that the following election shall be made:

2.2. Effective Date of Election. The Election shall be effective as of (the "Election Effective Date") and, where applicable, Parties shall cooperate in making any required filings or notices to governmental or regulatory authorities.

2.3. Responsibility for Filing. The Party responsible for preparing and filing the Election documentation shall be: . Such Party shall deliver to the other Party, within days of filing, a copy of the filed documentation and proof of delivery to any applicable authority.

3. REPRESENTATIONS AND WARRANTIES

3.1. Mutual Representations. Each Party represents and warrants to the other Party that: (a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation; (b) it has the corporate or other power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and (c) this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms.

3.2. Electing Party Representations. The Party making the Election represents and warrants that it has obtained all necessary approvals and consents required to make the Election and that, to the best of its knowledge, the facts provided to any governmental authority in connection with the Election are true and complete in all material respects.

4. COVENANTS

4.1. Cooperation. Each Party shall cooperate fully and execute such further documents and take such further actions as may be reasonably necessary or desirable to effectuate and preserve the Election, including delivering consents, certificates and other confirmations.

4.2. Tax Filings and Communications. The Parties shall coordinate the preparation and filing of any tax or regulatory forms and shall consult in good faith with respect to the content of any required statements or disclosures. The Party responsible for filing shall provide copies to the other Party and reasonable access to relevant records upon request.

5. INDEMNIFICATION

5.1. Indemnity by Electing Party. The Party making the Election (the "Indemnifying Party") shall indemnify, defend and hold harmless the other Party (the "Indemnified Party") from and against any and all losses, liabilities, taxes, interest, penalties, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from any inaccuracy in the representations and warranties of the Indemnifying Party or from the Indemnifying Party's failure to timely file or properly document the Election, except to the extent caused by the Indemnified Party's gross negligence or willful misconduct.

5.2. Procedure. The Indemnified Party shall provide prompt written notice to the Indemnifying Party of any claim for which indemnification is sought and shall cooperate in the defense or settlement of such claim. The Indemnifying Party shall have the right to assume and control the defense of any such claim with counsel of its choosing.

6. TERM AND TERMINATION

6.1. Term. This Agreement shall become effective on the Effective Date and shall continue in effect until all obligations under this Agreement related to the Election have been fully satisfied or otherwise terminated in accordance with this Section 6.

6.2. Termination. This Agreement may be terminated by mutual written agreement of the Parties or by either Party if the Election is invalidated by a competent authority, provided that termination shall not relieve any Party of liabilities or obligations accrued prior to termination.

7. NOTICES

All notices, requests, consents, claims, demands and other communications hereunder shall be in writing and shall be delivered to the Parties at the addresses set forth below (or at such other address for a Party as shall be specified in a notice given in accordance with this Section).

8. AMENDMENT; WAIVER

8.1. Amendment. No amendment or modification of this Agreement shall be valid or binding unless made in writing and signed by both Parties.

8.2. Waiver. No waiver by either Party of any breach, default or right under this Agreement shall be effective unless in writing and signed by the Party waiving the breach, default or right.

9. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

9.1. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State specified for governing law: , without giving effect to its conflict of laws principles.

9.2. Severability. If any provision of this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired.

9.3. Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter.

10. COUNTERPARTS; EXECUTION

10.1. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

10.2. Authority to Bind. Each signatory represents and warrants that he or she has full power and authority to execute and deliver this Agreement on behalf of the Party for which such person signs and to bind such Party to the terms hereof.

ADDITIONAL PROVISIONS

11.1. Confidentiality. The Parties shall keep confidential any non-public information exchanged in connection with the Election, except as required by law or to the extent necessary to effectuate the Election.

11.2. Further Assurances. Each Party shall execute and deliver such additional instruments and take such further actions as may be necessary or desirable to carry out the intent and purpose of this Agreement.

ENTITY AND ELECTION TYPES

Indicate the type of election being made (check all that apply):

Tax-related election

Corporate entity/organizational election

Other election — describe:

MISCELLANEOUS

The Parties acknowledge that each has had the opportunity to obtain independent legal and tax advice regarding the consequences of the Election, that they have read and understand this Agreement, and that they enter into this Agreement voluntarily and without duress.

Party A:

By:

Date:

Party B:

By:

Date:

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What an Election Agreement Is and why it matters

An Election Agreement is a written contract in which one or more parties formally choose a specific legal option, benefit, or statutory treatment and agree to the terms that apply to that choice. Examples include corporate shareholder elections, employee benefit elections, and tax elections under federal or state rules. The document records the parties' intent, effective date, scope of the election, and any consideration exchanged. Properly executed, it serves as record evidence for internal governance, regulatory compliance, and potential third-party review.

Why using a clear Election Agreement reduces risk

An Election Agreement clarifies the elected option, sets binding responsibilities, and creates an auditable record for compliance and dispute resolution. It reduces ambiguity between parties, supports regulatory reporting where applicable, and documents timing and conditions tied to the election.

Why using a clear Election Agreement reduces risk

Who typically prepares and signs Election Agreements

Common users include corporate counsel, HR professionals, plan administrators, and contracting parties who need to record formal choices.

  • Employers and HR teams handling benefit and payroll elections with internal compliance needs.
  • Corporate secretaries and boards documenting shareholder voting selections or governance elections.
  • Tax and finance staff executing statutory elections that affect reporting or tax treatment.

Identify the appropriate signer and necessary approvals early to avoid rework, missed filing requirements, or inconsistent internal records.

Typical signers and their responsibilities

HR Manager

HR managers prepare employee-facing Election Agreements for benefits or payroll changes, verify enrollment windows, ensure consumer disclosures when electronic consent is used, and coordinate signatures. They must confirm dates, employment IDs, and accurate benefit codes to avoid payroll errors and regulatory exposure.

Corporate Counsel

Corporate counsel drafts and reviews Election Agreements that affect governance, shareholder rights, or statutory elections. They evaluate enforceability, governing law clauses, and required approvals, and advise on retention, notarization needs, and coordinating filings when legally necessary.

How Election Agreements are used in practice

Real-world scenarios show how clear wording and proper execution reduce delays, support compliance, and preserve enforceable records across industries.

Real Estate Closing

A property seller executes an Election Agreement to waive escrow conditions and select post-closing tax allocation, requiring coordinated signatures.

  • Remote signing shortens closing windows and travel.
  • "I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently."

Healthcare Consent

A clinic uses an Election Agreement to record patient selection of treatment options and consent for sharing records with specialists.

  • Digital signatures streamline patient intake and consent.
  • "The airSlate SignNow team has been exceptional, responsive, the API has been great, and we're extremely happy that we chose airSlate SignNow as a company."

Stepwise process to prepare and execute an Election Agreement

Follow these steps to prepare, execute, and preserve an Election Agreement to ensure clarity, enforceability, and compliance with any applicable filing or reporting rules.

  • 01
    Draft: Describe election, effective date, parties, and consideration.
  • 02
    Review: Have counsel review governing law and approvals required.
  • 03
    Sign: Collect signatures and dates from all authorized signatories.
  • 04
    Record: Store executed copy and distribute to parties and advisors.

How to configure an online signing workflow

Configure an online Election Agreement workflow to collect signatures, apply conditional fields, and preserve audit trails for compliance.

Field Configuration
Signature Authentication Email link, SMS code, or KBA
Form Fields Use conditional and calculated fields to capture election specifics
Document Routing Sequential signer order or parallel signers
Audit Trail Capture IP, timestamp, and action history

Technical considerations for electronic completion

For electronic execution, confirm platform integrations, authentication options, and export formats before sending the Election Agreement for signature.

  • Integrations: Salesforce, NetSuite, Google Workspace supported
  • Formats: PDF, DOCX, and Excel formats
  • Auth Methods: Email, SMS, or multi-factor

Typical routing flow for execution and archiving

Typical routing for an Election Agreement from sender to signer to archive, highlighting authentication and audit capture at each stage.

  • Upload: Sender uploads and names the agreement
  • Place Fields: Add signature, date, and conditional fields
  • Authenticate: Choose email, SMS, or stronger methods
  • Complete: Signed copies and audit trail distributed

Practical tips to reduce disputes and delays

Follow best practices to minimize disputes and ensure the Election Agreement serves as reliable evidence of intent and timing.

Confirm Authority
Verify each signer's authority to make the election and document proof of authorization. For corporations, attach board resolutions or corporate authorizations to avoid later challenges to validity. Include contact details for verification.
Use Clear Language
Draft unambiguous election descriptions, reference exhibits, and avoid legalese that can obscure the precise choice made and its effects. Also specify whether the election is revocable or irrevocable and what actions trigger change.
Preserve Records
Store executed copies, audit logs, and related exhibits in secure systems with access controls and retention schedules aligned to legal requirements. Also record who accessed files and when to support audits or litigation.
Confirm Notifications
Notify affected parties and third-party administrators after execution and document who received each copy to reduce downstream confusion.

Common mistakes to avoid when preparing an Election Agreement

  • Failing to identify the authorized signer often leads to unsigned or invalid agreements, delays in implementation, and internal disputes over authority and scope.
  • Using vague election language or omitting exhibit references creates ambiguity about scope and can trigger litigation or months-long clarification processes.
  • Missing or incorrect dates, including effective and execution dates, can alter rights, reporting periods, or statute-of-limitations calculations.
  • Not preserving an immutable audit trail or secure record increases risk of evidence challenges during audits, regulatory reviews, or disputes.

Consequences of an incorrect or incomplete Election Agreement

Enforceability Risk: Agreement may be voidable
Tax Impact: Incorrect election triggers tax penalties
Regulatory Penalties: Fines or administrative sanctions possible
Payroll Errors: Backup withholding or misreporting
Contract Disputes: Increased litigation risk
Recordkeeping Violations: Retention noncompliance fines

Essential data elements to capture

Party Names: Full legal names required
Election Description: Clear election option and scope
Effective Date: MM/DD/YYYY format required
Consideration: Amount or 'no consideration' stated
Signatures: Typed or drawn with audit trail
Notary Block: Notary/witness info if required

How eSignature plans compare for executing Election Agreements

Overview of common eSignature plans and features to consider when executing an Election Agreement; signNow is listed first per comparison format.

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 Yes, 7-day trial Yes, trial available Yes, trial available Yes, trial available Yes, trial available
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

FAQs and troubleshooting for Election Agreements

Answers to common questions about electronic execution, authority, notarization, revocation, and retention for Election Agreements.


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