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American Bar Association - Defending Liberty, Pursuing Justice

Summer 2008

Vol. 4, No. 4

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Business Law

 

Say “Yes” to Notaries

Your client just signed a lucrative contract to build a million widgets that you spent hours negotiating. Your client is thrilled with your work, and you’re about to enjoy a well-deserved vacation. You are just about to stroll out of your office wearing a wide smile when your newly elated client calls with a question that stops you dead in your tracks: “Does it matter the signatures to the contract were not notarized?”

What? You didn’t have the signatures to the contract notarized?

Big mistake, says Tim Reiniger, executive director of the National Notary Association in Pasadena, California. According to Reiniger, having a notary public witness a signature is a “powerful risk management tool to prevent fraud and identity theft.”

A notary public is a person with a special commission from a state or county government that allows him or her to acknowledge the official witnessing of another person’s signature on a document. According to Reiniger, there are 4.5 million notaries in the United States. That figure does not include the millions of lawyers nationwide who by virtue of being an attorney are also vested with that authority. Each state maintains its own rules about whether attorneys are automatically notaries.

He says having a contract signature notarized is important for a few reasons. Chief among them is that under the Federal Rules of Evidence, a notarized document is considered “self-authenticating.” The same is true under the rules of evidence in effect in each state, although there are a few states that don’t follow this norm. When a document is self-authenticating, the signers of the contract do not need to testify in court to verify the authenticity of their signatures. That saves a lot of time and money. Having a document notarized is, says Reiniger, “a huge strategic advantage” in litigation.

Although the duties of a notary public might seem simple to execute, they are extremely important. First, notaries cannot attest to witnessing a signature unless the signer signs the document in their presence. To ensure the parties signing the document are the real people who are supposed to do so, some states require signers to present identification to the notary. The notary must also ascertain whether people are signing the document voluntarily or under duress. This is especially crucial when a senior citizen or someone with limited English skills is signing a document, says Reiniger. In some states, notaries are required to maintain a journal of the documents they notarize. The journal details the type of identification presented to the notary and a basic description of the document they notarized.

While in the distinct minority, a handful of states require notaries to attend educational courses prior to becoming commissioned. States imposing these restrictions are North Carolina, Pennsylvania, Florida, Missouri, Oregon, and California. Reiniger says he sees this educational requirement a trend in the industry, one he wholeheartedly supports. “Notaries should receive basic training about their duties,” he says.

He also notes that simply by virtue of being lawyers, attorneys in 11 states are granted notarial authority, although with a few caveats. For example, in Missouri, a state that requires its notaries to undergo educational training prior to becoming commissioned, lawyers wishing to also become notaries are not exempt from that educational requirement. However, in North Carolina, another state that requires precommission education for notaries, attorneys are exempt from participating in those same courses. In New Hampshire, state laws grant broad yet not total notarial authority. However, in Ohio, New York, New Jersey, Connecticut, Louisiana, Maine, North Dakota, and Wisconsin, lawyers are granted full notarial authority.

In one state, California, notaries are also required to obtain the thumbprint of signers in a notary journal, but only in three specific situations. They are when a deed is signed, when a quitclaim deed is signed, or when deeds of trust affecting real property are notarized.

“Prosecutors love it because it leaves an evidence trail,” says Reiniger. Having the thumbprint of a person who fraudulently signed a contract gives “absolute proof of the frauder’s identity,” should that become an issue, he says. Journal entries require a detailed description of the notarial act and are even considered public records.

The determination of venue is another important reason behind getting contractual signatures notarized, says Aronson. Venue identifies the “proper or possible place for a lawsuit to proceed, usually because the place has some connection either with the events that gave rise to the lawsuit or with the plaintiff or defendant,” Aronson says.

However, venue is not the deciding factor for where a case is tried. A court decides the jurisdiction of a case, which determines who has the legal authority to preside over a legal matter. Therefore, jurisdiction may be different from the venue, says Aronson.

Therefore, for many reasons, it’s important to say yes to having signatures to a contract notarized. That simple act could go a long way in saving your client money and aggravation and you a huge malpractice payout.

Tami Kamin-Meyer is an Ohio attorney and writer.

© Copyright 2008, American Bar Association.