A notary public is a person who has a specialized commission from a state or county government to allow him or her to acknowledge or officially witness another person’s signature on a document. The purpose of the law is to provide a form of legal guarantee that the person signing the document is the actual person who signature appears on this document.

The fact is: In a World where business transitions are an intricate aspect of doing business, one of these days you and your business may unfortunately end up in court over a contract dispute. No matter how hard you try to avoid it, it is simply a reality of doing business.

One very simple, economical but very efficient legal tip that could put you in a winning position in court is to make sure all the signatures on important contracts or agreements are acknowledged by a notary public. State another way, have the signatures notarized.

There is doubt that often times it is extremely difficult to find a notary public to witness the signing of a contract. However, smart businesspersons know the financial and legal benefit of having signatures on that important contract or agreement notarized.

In the past, it was legally prudent to have various types of contracts notarized. In this day and age, nonetheless, the law in general requires that only a few types of documents have to be notarized to be lawful and valid. The most well-known area of law where notarization of documents is mandatory is still real estate deeds.

As a result, if the law doesn’t mandate that you notarize signatures on your contracts, why would you want to? Why waste the time adding a layer of protection when you don’t have to? There are two practical and money-saving reasons.

First, it may sound quite unbelievable, but a person may ultimately deny in court that he signed a contract, particularly if that contract placed him in an extremely compromising and damaging position. Once a person denies signing a contract, there are huge, extremely expensive, and arduous legal hurdles you and your lawyer will have to overcome to win in court.

Fortunately, if have all signatures notarized you can prevent these obstacles with a very simple and inexpensive precautionary measure that will almost surely stop such an extremely expensive nightmare dead in its tracks.

The awesome power behind a notarized document with a signature is that many state courts and all federal courts automatically declare a notarized signature to be authentic in court. For instance, Rule 902(8) of the Federal Rules of Evidence in a U.S. court states the following: “Extrinsic evidence of authenticity as a condition precedent to admissibility is not required with respect to the following: “Acknowledged documents. Documents accompanied by a certificate of acknowledgment executed in the manner provided by law by a notary public or other officer authorized by law to take acknowledgments.”

Simply stated, when a person’s signature has been notarized, many courts waive the legal requirement of proving authentication of the contract and that in and of itself can save you a great deal of time, headaches, heartaches and especially money in court.

There’s another important reason for requiring notarization of signatures on important documents: Notaries are typically required by some states or counties to be bonded by insurance companies.

This can be important to you’ Considering the example of a contract where all the signatures have been notarized but later during the court proceeding one of the parties denies ever signing the contract.

The notary public is then subpoenaed into court to testify that he did in fact witness the party sign the contract and that the signature is his or hers as is indicated in the notary acknowledgements. If it is subsequently discovered that the notary made a mistake when he or she verified the signatures (for example, failed to check their identification or failed to actually witness the signing), then the insurance company who issued the bond for the notary will likely be responsible for any damages that your business incurs if the notary’s mistake causes you to lose the contract lawsuit.

Although the dollar amounts of notary’s bonds are not huge (typically in the range of a few thousand dollars), you need to ask yourself this money-saving question the next time you sign a very important contract: If I can’t prove in court that the other party actually signed my contract, who’s going to pay for that mistake, me or some notary who is bonded by an insurance company? The answer to that question is self-evident, so obviously there is no need to insult your intelligence by stating the obvious (i.e., it is better that the money comes out of someone else’s pocket instead of not mine).

Note: The information in this column is provided by the author, not dglegalsupportservices.com. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding any corresponding tax matters.