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Proposed Legal Agreement

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PROPOSED LEGAL AGREEMENT

This Proposed Legal Agreement (the "Agreement") is entered into as of Effective Date: by and between Client Name: and Service Provider Name: . Each of the foregoing is referred to individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Client seeks to retain Service Provider to perform certain services described herein, and Service Provider has represented that it has the expertise, personnel and resources necessary to perform such services in accordance with the terms of this Agreement;

WHEREAS, the Parties desire to set forth the terms and conditions under which Service Provider will perform the services and deliverables and the compensation, confidentiality and related obligations applicable to the Parties;

WHEREAS, the Parties intend for this Agreement to govern their rights and obligations with respect to the subject matter hereof and to provide a basis for continuing cooperation between them.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Services" means the services to be provided by Service Provider as set forth in Section 2 and the Statement of Work attached hereto or later agreed in writing. "Deliverables" means tangible work product delivered to Client as set forth in the applicable Statement of Work.

1.2 Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the applicable Statement of Work or as otherwise agreed in writing by the Parties.

2. SCOPE OF SERVICES

Service Provider shall perform the Services described in the following statement. Service Provider shall use commercially reasonable efforts, skill and care in the performance of the Services in accordance with industry standards.

3. COMPENSATION AND PAYMENT

3.1 Fees. Client shall pay Service Provider the fees set forth below and in each applicable Statement of Work. Fees are exclusive of applicable taxes and expenses unless otherwise stated.

3.2 Late Payment. Any amount not paid when due shall accrue interest at the lesser of 1.5% per month or the maximum rate permitted by law. Client shall be responsible for reasonable collection costs and attorneys' fees in the event of nonpayment.

4. TERM AND TERMINATION

4.1 Term. The term of this Agreement shall commence on Term Start Date: and shall continue for an initial period of months unless earlier terminated in accordance with this Agreement.

4.2 Termination for Cause. Either Party may terminate this Agreement for material breach by the other Party that remains uncured thirty (30) days after written notice of such breach.

4.3 Effect of Termination. Upon termination, Client shall pay Service Provider for all Services performed and expenses incurred through the effective date of termination. Sections that by their nature survive termination shall survive.

5. CONFIDENTIALITY

5.1 Definition. "Confidential Information" means non-public information disclosed by a Party that is designated as confidential or that reasonably should be understood to be confidential.

5.2 Obligations. Each Party shall: (a) hold Confidential Information in strict confidence; (b) not disclose Confidential Information to third parties except to its employees, contractors and advisors who need to know and are bound by confidentiality obligations; and (c) use Confidential Information solely for performance under this Agreement.

5.3 Exceptions. Confidential Information does not include information that is or becomes public through no fault of the receiving Party, that was rightfully known prior to disclosure, or that is independently developed without use of the disclosing Party's Confidential Information.

6. INTELLECTUAL PROPERTY

6.1 Ownership of Preexisting Materials. Each Party retains all right, title and interest in and to its preexisting intellectual property. No license to such preexisting intellectual property is granted except as expressly set forth in this Agreement.

6.2 Deliverables. Unless otherwise agreed in writing, Service Provider hereby assigns to Client all right, title and interest in and to the Deliverables, and Service Provider shall execute all instruments reasonably requested to effect such assignment.

7. WARRANTIES AND DISCLAIMERS

7.1 Service Provider warrants that the Services will be performed in a professional and workmanlike manner in accordance with generally accepted industry standards. For any breach of this warranty, Client's sole and exclusive remedy shall be re-performance of the deficient Services or, if Service Provider fails to re-perform, a refund of the fees paid for the deficient Services.

7.2 EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH ABOVE, THE SERVICES AND DELIVERABLES ARE PROVIDED "AS IS" AND SERVICE PROVIDER DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY OR ARISING FROM COURSE OF DEALING.

8. INDEMNIFICATION

8.1 Each Party shall indemnify, defend and hold harmless the other Party and its officers, directors and employees from and against any third party claims arising from the indemnifying Party's gross negligence, willful misconduct or breach of its obligations under this Agreement.

9. LIMITATION OF LIABILITY

9.1 EXCEPT FOR LIABILITY ARISING FROM A PARTY'S GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR INDEMNIFICATION OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE TOTAL AMOUNTS PAID OR PAYABLE TO SERVICE PROVIDER UNDER THIS AGREEMENT IN THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

10. INSURANCE

11. NOTICES

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below by hand, nationally recognized overnight courier, certified mail (return receipt requested), or email with confirmation of receipt. Notices are effective upon receipt.

12. AMENDMENTS; WAIVER

12.1 No amendment or modification of this Agreement shall be valid unless set forth in a written instrument signed by authorized representatives of both Parties.

12.2 No waiver of any breach or right under this Agreement shall be effective unless in writing and signed by the Party granting the waiver; the waiver of any breach shall not constitute a waiver of any subsequent breach.

13. GOVERNING LAW

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

14. ENTIRE AGREEMENT; SEVERABILITY

14.1 Entire Agreement. This Agreement, including all statements of work and attachments expressly incorporated herein, constitutes the entire agreement between the Parties with respect to the subject matter and supersedes all prior and contemporaneous agreements, proposals or understandings, whether oral or written.

14.2 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect and the Parties shall negotiate in good faith a substitute provision to effect the original intent.

15. COUNTERPARTS

This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures transmitted by electronic means shall be deemed binding.

ADDITIONAL PROVISIONS

Client Printed Name:

By:

Date:

Service Provider Printed Name:

By:

Date:

Enter text✕

What a Proposed Legal Agreement Is and When It’s Used

A Proposed Legal Agreement is a draft contract presented to one or more parties for review, negotiation, and signature. It sets out proposed terms, obligations, deliverables, pricing, and timelines but remains non-binding until executed. Organizations commonly exchange proposed agreements during procurement, mergers, vendor onboarding, real estate transactions, and services engagements to document expectations before finalizing obligations. The document should clearly label its status (e.g., "Proposed" or "Draft"), specify the effective date and parties, and include signature blocks so the final executed version can be produced without rekeying or recreating content.

Why a Clear Proposed Legal Agreement Matters

A well-structured proposed agreement reduces ambiguity, speeds negotiation, and establishes a paper trail for later enforcement. Clear drafts limit disputes by identifying responsibilities, deadlines, remedies, and governing law up front, which simplifies legal review and supports later e-signature and retention compliance under ESIGN and state UETA frameworks.

Why a Clear Proposed Legal Agreement Matters

Typical Users and Stakeholders

Teams across legal, procurement, sales, and operations interact with proposed agreements at different stages of deal flow.

  • Legal teams and outside counsel who draft, review, and redline contract language before execution.
  • Procurement or vendor management who approve supplier terms, pricing, and service levels.
  • Sales and account managers who negotiate commercial terms and obtain customer signature.

Coordinating these stakeholders early reduces rework, ensures consistent obligations, and shortens time to execution.

Roles That Commonly Sign or Approve

General Counsel

In-house counsel typically approves clause language, identifies mandatory compliance requirements, and negotiates risk allocation; they ensure the agreement aligns with company policy and statutory obligations before final signature.

Contract Manager

Contract managers or procurement leads handle practical terms, commercial schedules, payment milestones, and renewals; they coordinate signatories and retain executed copies according to retention rules.

Step-by-Step: From Draft to Signed Agreement

Follow a consistent sequence to reduce errors and ensure the document is enforceable and properly retained.

  • 01
    Prepare Draft: Draft clear terms and label as 'Proposed' to avoid premature enforcement.
  • 02
    Internal Review: Route to legal, procurement, and finance for redlines and approvals.
  • 03
    Counterparty Review: Share the proposed agreement and collect redlines or negotiated changes.
  • 04
    Execution: Obtain signatures (electronic or wet) and distribute executed copies to parties.

Typical Routing and Processing Flow

A predictable routing workflow helps enforce signer order, capture audit data, and ensure required approvals appear before final signature.

  • Upload Document: Store a single source-of-truth version prior to placing signature fields.
  • Place Fields: Add signature, date, initial, and conditional fields as needed.
  • Assign Signers: Set signer order and authentication methods (email, SMS, KBA).
  • Capture Audit: Record timestamps, IP addresses, and completion certificates for each signer.

Recommended Digital Workflow Settings

Configure standard settings so each proposed agreement follows the same authentication and retention rules.

Field Configuration
Authentication Method Email PIN | SMS OTP | KBA optional
Signer Order Sequential or parallel per approval needs
Notification Automatic reminders and completion emails
Retention Setting Automatic archival after execution

Technical Requirements for eSigning and Sharing

Ensure your platform supports required integrations and formats to avoid delays in execution.

  • File Formats: PDF, DOCX supported
  • Integrations: Salesforce, NetSuite, MS 365, Google Workspace
  • Authentication: Email, SMS, KBA, SSO

Choose a platform that captures a strong audit trail and stores signed copies in standard formats for retention and production.

Essential Clauses and Structure to Include

A professional proposed agreement should include discrete sections so reviewers can quickly locate terms and potential issues.

Parties

Identify each contracting party precisely, including legal form and jurisdiction of formation, to avoid ambiguity about who has rights and obligations under the contract.

Recitals

Briefly state the purpose and background facts that frame the agreement; recitals help courts interpret intent if disputes arise later.

Definitions

Collect key terms in a definitions section to ensure consistency across obligations, deliverables, and performance standards throughout the document.

Main Terms

Describe scope of work, deliverables, schedule, pricing, payment terms, and acceptance criteria in clear, measurable language to minimize disputes.

Representations and Warranties

Allocate risk by stating each party’s promises about authority, compliance, and product or service fitness; include remedies for breach.

Termination and Remedies

Specify termination rights, notice periods, cure opportunities, and remedies, including any liquidated damages or limitation of liability clauses.

Security and Compliance Controls to Record

Encryption: TLS 1.2/1.3 in transit
Data at Rest: AES-256 encryption
Audit Trail: Detailed signer logs
Certifications: SOC 2 Type II
Regulatory: HIPAA (BAA available)
21 CFR: 21 CFR Part 11 support

Common Mistakes to Avoid When Preparing This Document

  • Leaving the agreement unlabeled as 'Draft' or 'Proposed' and then circulating it as final creates enforcement confusion.
  • Using inconsistent party names or abbreviations causes attribution issues and may void related tax reporting or vendor onboarding.
  • Omitting effective date or ambiguous milestone language leads to disputes about when obligations begin or deadlines run.
  • Failing to specify governing law and dispute resolution adds time and cost if a dispute arises across jurisdictions.

Key Legal Risks and Potential Penalties

1099 Penalties: Late or incorrect 1099s can trigger IRC §6721 penalties (e.g., $60–$330 per form)
I-9 Violations: I-9 paperwork failures may result in fines of $281–$2,789 per violation (8 CFR §274a.2)
Invalid Signature: Insufficient attribution risks voiding consent under ESIGN/UETA
HIPAA Fines: Unauthorized PHI disclosures can produce civil penalties and corrective actions
Contractual Exposure: Poorly defined obligations increase breach and indemnity liability
Data Breach Costs: A breach carries notification, remediation, and potential statutory fines

Time-Critical Dates and Filing Benchmarks

Track statutory and contractual deadlines separately; tax filing and contract notice windows have different triggers and consequences.

Provide W-9:

Supply on payer request; keeps backup withholding off

1099-NEC:

File and deliver by January 31 (recipient and IRS)

1040 Individual:

Tax returns due April 15 (Form 4868 extends filing to Oct 15)

Contract Notice:

Observe notice and cure periods specified in termination clauses

Record Retention:

Retain executed agreements per applicable retention schedule

Key Milestones from Proposal to Execution

A sequential milestone view helps teams track progress and escalate approvals when needed.

01

Draft Prepared

Initial draft completed and labeled 'Proposed' for circulation

02

Internal Approval

Legal and finance approve commercial and compliance terms

03

Counterparty Signoff

Counterparty returns signed or redlined version

04

Final Execution

Fully executed document distributed to stakeholders and archived

Frequently Asked Questions and Troubleshooting

Answers to common questions about enforceability, e-signing, notarization, and retention for a proposed legal agreement.


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