Is an electronic signature valid?

Yes. Electronic signatures are legally valid in most U.S. transactions under the ESIGN Act (15 U.S.C. ch. 96) and UETA, provided intent, consent, attribution, and record retention requirements are met.

When is notarization necessary?

Notarization depends on state law and document purpose. Deeds, certain affidavits, and some court filings often require notarization; check the applicable state statute or county recorder rules.

Can I use signNow for this agreement?

signNow supports ESIGN/UETA compliance, SOC 2 Type II, HIPAA with a BAA, and encryption (TLS/AES-256); choose authentication and retention settings to meet your legal and business requirements.

What if a party disputes the payment method?

Maintain audit trails, signed consent to electronic records, and documentation of payment instructions. Dispute resolution clauses and chargeback procedures help manage and resolve conflicts.

How should bank details be protected?

Limit exposure of bank details, use secure transmission channels, restrict access, and store account information only as necessary for processing and audit purposes.

How do I amend a signed agreement?

Amendments require mutual consent and signatures following the original execution method; record the amendment with a date and retain the combined executed record.

Electronic Signature
Templates
Legal
Legal Tender Agreement

Legal Tender Agreement

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

LEGAL TENDER AGREEMENT

This Legal Tender Agreement (the "Agreement") is made and entered into as of by and between Party A: , Entity Type: Individual Corporation LLC Other and Party B: , Entity Type: Individual Corporation LLC Other.

RECITALS

WHEREAS, Party A and Party B have entered into obligations pursuant to certain transaction(s) described as: (the "Obligation"); and

WHEREAS, the parties desire to set forth the forms of legal tender, timing of payment, allocation of risk for non-cleared funds, and related procedures with respect to payment and discharge of the Obligation; and

WHEREAS, the parties intend that payments made in accordance with this Agreement shall constitute full and final satisfaction of the Obligation upon satisfaction of the conditions set forth herein.

NOW, THEREFORE

In consideration of the mutual promises set forth herein and other good and valuable consideration, the sufficiency of which is acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Legal Tender" means lawful money of the United States of America and other forms of immediately cleared funds expressly accepted in writing by the payee in accordance with this Agreement.

1.2 "Cleared Funds" means funds that are irrevocably available for unrestricted use and are not subject to reversal, hold, or chargeback by any financial institution.

2. ACCEPTABLE FORMS OF TENDER

2.1 Unless otherwise agreed in writing, Party B shall accept payment of the Obligation in the following forms (select applicable boxes): Cash (United States currency; subject to verification) Wire transfer of cleared funds Cashier's check or certified check (subject to clearance) ACH transfer (subject to settlement rules) Other (specify):

3. PAYMENT TERMS

3.1 Amount. The amount of the Obligation payable under this Agreement is in unless otherwise specified in writing.

3.2 Payment Date. Payment shall be made on or before . Payment received after the due date shall be treated as late in accordance with Section 8.

3.3 Payment Instructions. Payment shall be delivered pursuant to the payment_instructions set by the payee. Payment instructions:

Payment Instructions

4. CLEARANCE, RISK AND CONVERSION

4.1 Risk of Non-Cleared Funds. Payment by instrument that is not Cleared Funds, including but not limited to personal checks, is accepted at the risk of Party A. Notwithstanding delivery, the Obligation shall not be considered satisfied until such instrument has resulted in Cleared Funds and is not subject to reversal or chargeback.

4.2 Conversion. If payment is made in a currency other than that specified in Section 3, conversion to the specified currency shall be effected at the spot rate published by the payee's bank on the date payment is credited to the payee's account, and any loss arising from conversion shall be borne by Party A unless otherwise agreed in writing.

5. REPRESENTATIONS AND WARRANTIES

5.1 Each party represents and warrants to the other that it has full power, authority and legal capacity to enter into and perform its obligations under this Agreement and that the execution, delivery and performance of this Agreement has been duly authorized.

5.2 Party A specifically represents and warrants that any funds tendered will be lawful, free of liens and encumbrances, and not the proceeds of unlawful activity. Party A shall promptly replace any tender later found not to constitute Cleared Funds.

6. INDEMNIFICATION

6.1 Each party agrees to indemnify, defend and hold harmless the other party from and against any and all liabilities, losses, claims, damages, costs and expenses (including reasonable attorneys' fees) arising out of or relating to breach of its representations and warranties, acts of negligence, or failure to deliver Cleared Funds as required by this Agreement.

7. TAXES AND WITHHOLDING

7.1 Unless expressly agreed otherwise in writing, Party A shall be responsible for any withholding, taxes, or other governmental charges applicable to payments made under this Agreement. Party A shall indemnify Party B for any liability arising from Party A's failure to withhold or account for required taxes.

8. DEFAULT; REMEDIES

8.1 Events of Default shall include failure to tender payment in Cleared Funds by the date specified in Section 3.2. In the event of Default, the non-defaulting party may pursue all remedies available at law or in equity, including acceleration of the Obligation and recovery of costs and expenses, including reasonable attorneys' fees.

8.2 Interest on overdue amounts shall accrue at an annual rate of or the maximum rate permitted by applicable law, whichever is less, calculated from the date payment was due until payment in full of Cleared Funds.

9. NOTICES

9.1 All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as a party designates by written notice in accordance with this Section. Notices shall be deemed given when delivered by personal delivery, when transmitted by confirmed facsimile during normal business hours, or three (3) business days after deposit with a nationally recognized overnight courier.

Party A - Notice Address Party B - Notice Address

10. AMENDMENTS; WAIVER; COUNTERPARTS

10.1 This Agreement may be amended or modified only by a written instrument executed by both parties. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom the waiver is asserted.

10.2 This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile or electronic copies of signatures shall be deemed originals for all purposes.

11. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of law principles.

11.2 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 and understandings, whether written or oral.

11.3 Severability. If any provision of this Agreement is held invalid or unenforceable, such provision shall be enforced to the maximum extent permissible and the remaining provisions shall remain in full force and effect.

12. MISCELLANEOUS

12.1 Remedies Cumulative. Except as otherwise provided herein, the remedies provided under this Agreement are cumulative and in addition to any other remedies available at law or in equity.

12.2 Cooperation. The parties shall execute and deliver such further documents and take such further actions as may be reasonably necessary to effectuate the purposes of this Agreement.

Party A:

By:

Date:

Party B:

By:

Date:

What a Legal Tender Agreement Is and When it Applies

A Legal Tender Agreement documents which forms of payment a party will accept and the legal framework governing those payments. It typically specifies the acceptable currencies, electronic payment methods, timing of payment, and remedies for nonpayment. In some contexts this agreement also allocates risk for returned items, payment reversals, and chargebacks. Legal Tender Agreements are used by businesses, government contractors, and financial counterparties to reduce ambiguity about payment methods and to create an enforceable record of consent to electronic or paper payment terms.

Why a Clear Legal Tender Agreement Matters

A concise Legal Tender Agreement reduces payment disputes, clarifies accepted instruments, and documents consent to electronic records under the ESIGN Act and UETA. It supports enforceability, auditability, and compliance with industry-specific rules such as HIPAA or federal procurement requirements.

Primary Users and Typical Signers

This agreement is used by organizations that need to specify acceptable payment methods and related controls.

Finance teams and accounts receivable professionals who set billing and collection policies.
Procurement and contracting officers managing vendor payment terms and invoicing.
Legal counsel and compliance officers who ensure payment provisions meet regulatory obligations.

Signers are usually authorized officers, corporate finance representatives, or delegated agents with contract authority.

Core Elements to Include in a Professional Agreement

A comprehensive Legal Tender Agreement combines identification, allowed payment types, timing, remedies, and signatures to create clarity and enforceability.

Parties

Full legal names and entity types for each party, including DBA names and federal tax ID when relevant, to establish who is bound.

Accepted Payment

List permitted currencies, card networks, ACH, wire transfer details, and accepted digital wallets. Define whether cryptocurrency or stablecoins are allowed.

Payment Timing

Specify due dates, grace periods, interest on overdue amounts, and event triggers for accelerated payment.

Remedies

State late fees, chargeback handling, collection costs, setoff rights, and suspension of services following nonpayment.

Authentication

Describe required signature method (electronic signature, notarization, or witnessed signature) and authentication strength.

Governing Law

Identify the governing state law and venue for disputes and whether disputes will go to arbitration or court.

Key Compliance and Security Details to Record

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

Audit Trail: Timestamp, IP, and action history captured

HIPAA: BAA required for PHI in healthcare workflows

ESIGN/UETA: Electronic signatures recognized under federal and state law

21 CFR Part 11: Support for FDA-regulated electronic records when required

SOC 2: SOC 2 Type II available for enterprise compliance

Step-by-Step: Completing the Legal Tender Agreement

Follow these steps in order to prepare a clear, enforceable agreement and reduce processing delays.

01

Assemble details: Gather party names, bank data, and tax IDs.
02

Define methods: List allowed payment types and any exclusions.
03

Set timing: Specify due dates, grace periods, and interest.
04

Execute: Obtain required signatures and retain records.

How to Configure an Electronic Workflow

Set up fields and authentication choices to reduce signer friction while preserving legal certainty.

Field	Configuration
Signature Field	Required, visible date and name
Authentication Level	Email + SMS code or KBA as required
Conditional Rules	Show payment info only for selected methods
Retention Policy	Enable audit trail and PDF export

Typical Submission and Acceptance Flow

A standard electronic flow moves the document from sender to signer, captures consent, and stores a reproducible record.

Upload: Sender uploads the agreement file
Place fields: Insert payment and signature fields
Send: Deliver via email link or direct invite
Complete: Signer authenticates and signs; system records audit trail

Technical Considerations for eSigning and Delivery

Choose a platform that supports required formats, authentication, and retention to meet regulatory needs.

File Formats: PDF and DOCX accepted
Integrations: Connectors for Salesforce, NetSuite, Google Workspace
Authentication: Support for SMS, KBA, and SSO

Verify platform compliance for HIPAA, ESIGN/UETA, and any industry-specific controls before processing live transactions.

Timelines to Keep in Mind

Legal Tender Agreements have operational deadlines and recordkeeping timelines that affect disputes and tax reporting.

Effective Date Selection:

Choose MM/DD/YYYY on signing to mark obligations start

Invoice Due Date:

Specify net days (Net 30, Net 45) for payment timing

Chargeback Window:

Note processor time limits for disputes, often 60–120 days

Record Retention:

Keep executed copies per applicable retention rules

Contract Renewal:

Document renewal notice periods and auto-renew clauses

Key Processing Milestones

Track milestone stages from drafting through final archiving to ensure governance and audit readiness.

01

Drafting

Create the agreement and insert payment clauses

02

Internal Review

Legal and finance verify terms and bank details

03

Execution

Parties sign electronically or with required notarization

04

Archival

Store signed record with audit trail and backups

Common Preparation Errors to Avoid

Using informal or ambiguous payment language that fails to specify currency, method, or account details, creating collection disputes.
Mismatching legal names or tax IDs between contract and payment instructions, which can trigger bank freezes or backup withholding.
Failing to document consent to electronic records or to provide required consumer disclosures under ESIGN for consumer-facing transactions.
Neglecting to set authentication or notarization rules when state law or product type requires higher assurance levels.

Risks and Potential Consequences

Unenforceable Terms: Vague payment clauses may be invalidated

Chargebacks: Processors may reverse disputed payments

Regulatory Fines: Noncompliance with HIPAA or tax rules carries penalties

Reporting Errors: Incorrect TINs can trigger IRS backup withholding

Delay Costs: Late payments increase collection expense

Audit Failure: Incomplete records hinder audits or litigation

eSignature Vendor Pricing Snapshot

Compare starting prices and basic capability indicators across common eSignature vendors. signNow appears first per vendor comparison conventions.

	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	Free trial available	Free trial available	Free trial available	Free trial available
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions About Legal Tender Agreements

Answers to common questions about validity, signatures, notarization, and digital execution to help troubleshoot typical issues.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are legally valid in most U.S. transactions under the ESIGN Act (15 U.S.C. ch. 96) and UETA, provided intent, consent, attribution, and record retention requirements are met.
When is notarization necessary?
Notarization depends on state law and document purpose. Deeds, certain affidavits, and some court filings often require notarization; check the applicable state statute or county recorder rules.
Can I use signNow for this agreement?
signNow supports ESIGN/UETA compliance, SOC 2 Type II, HIPAA with a BAA, and encryption (TLS/AES-256); choose authentication and retention settings to meet your legal and business requirements.
What if a party disputes the payment method?
Maintain audit trails, signed consent to electronic records, and documentation of payment instructions. Dispute resolution clauses and chargeback procedures help manage and resolve conflicts.
How should bank details be protected?
Limit exposure of bank details, use secure transmission channels, restrict access, and store account information only as necessary for processing and audit purposes.
How do I amend a signed agreement?
Amendments require mutual consent and signatures following the original execution method; record the amendment with a date and retain the combined executed record.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now