What is a countersignature?
A countersignature is a second signature on a legal document that someone has already signed.
The second signature certifies the authenticity of the document.
Countersignatures are often needed when completing contracts for high-monetary value transactions, like a mortgage, or for significant events, like a marriage certificate. Depending on the situation, government officials, lawyers, notaries, or religious clergy can provide countersignatures, but sometimes it is simply another party to the contract.
When signing documents online, e-signature software facilitates the process of collecting countersignatures. The software lets users know when and where they need to sign and encrypts the document to make sure sensitive legal paperwork stays secure.
Types of documents requiring a countersignature
Countersignatures are used in a wide variety of legal transactions. Some examples of documents that require a countersignature include:
- Power of attorney. A power of attorney is a legal document that gives one person the right to act on another person’s behalf. In almost all states, a notary public must countersign a power of attorney to make it legally binding.
- Passport applications. In some countries, passport applications and photos require countersignatures before they are submitted. The UK has clearly outlined rules around this process: a countersignatory must have known the applicant for at least two years, be in good legal standing, and be able to identify them.
- Checks. Many types of money transfers, such as money orders, traveler’s checks, third-party checks, and cashier’s checks, require a countersignature.
- Mortgage and rental applications. A countersignature is typically required to provide validation when a signee is committing to a long-term agreement involving a high-value asset.
- Business agreements. Documents confirming transfers of business assets, such as merger and acquisition agreements, require a second signature. Other legally binding documents, like shareholder agreements, also need countersignatures.
Benefits of a countersignature
Requiring a countersignature on documents can save a company time, energy, and money in the future. Two specific benefits include:
- A sense of security. A countersignature provides additional reassurance that someone else can vouch for the original party or has provided approval or authorization for a business transaction.
- Legal protection. A company can use a countersignature as reinforcement or verification that the primary party agreed to the terms of an agreement. This can come in handy if the primary party doesn’t fulfill the contract terms and the company decides to sue.
Countersignature best practices
Before countersigning a contract or legal document, a company or individual should consider these best practices:
- Carefully read the document. When the person providing the countersignature is a third party called to witness a transaction, they may think they don’t have to read the contract carefully. However, countersignatories should always read agreements to understand what they are signing.
- Ask questions. Before providing a countersignature, a party should ask any remaining questions about their role and responsibilities. If necessary, they can consult with an attorney to understand the terms and conditions.
- Look for errors. In a multi-page agreement, mistakes do happen. Parties should check that all identifying information, including name, business name, and addresses, is accurate and spelled correctly.
Countersignatures are used more often than you think. Learn about document signing and its role in the contract management process.