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In the digital age, contracts are hosted on websites and apps, and signed by a click of a button. For some, however, this just isn't seamless enough.

Contract drafting software provider PactSafe has announced the launch of “Chat-to-Sign,” a new tool it says will bring contract approvals to a new frontier: chat messaging services. Legaltech News caught up with PactSafe to discuss how contracts via instant message works and why it is needed.

What it is: Chat-to-Sign is an application that allows users to extract data from conversations in messaging platforms Slack and Intercom and transfer that information into contract templates hosted on PactSafe's contract drafting tool. Once new contracts are created using the information, Chat-to-Sign can send the agreements to recipients via Slack or Intercom, and have them “sign” the contract through the messaging apps as well.

How such signing works is “akin to the same type of experience one has accepting terms of service” for online or mobile app services, i.e. pressing a button or checking a box, said Eric Prugh, co-founder and chief product officer at PactSafe.

Why is it needed? PactSafe believes that the ability to create and execute contracts via instant messages can allow different corporate teams to send out and manage contracts in a faster, more seamless fashion.

Since Slack is increasingly used as an internal communication channel between employees in a company, Prugh said Chat-to-Sign could be leveraged by the HR department to push out initial onboarding agreements, or by legal departments to send out NDAs to specific employees.

On the other hand, since Intercom is a chat messaging platform used by companies and their customers, Prugh added that Chat-to-Sign can also be leveraged to create and send out simple sales contracts. In fact, he noted that PactSafe uses its newly launched application for just that purpose.

To be sure, the types of contracts that Chat-to-Sign is meant to handle are fairly simple, straightforward agreements. “Generally, these are what we call high-velocity contracts,” Prugh said. “It's not going to be an agreement that is overly complex.”

How it works: While PactSafe automates much of the contract drafting process, exacting data from conversations in Slack and Intercom is a somewhat manual process. Using Chat-to-Sign, a person engaged in a conversation on one of the messaging platforms must highlight the messages they want extracted. From there, they upload the information to PactSafe's contract drafting tool, and use it to draft a personalized contract that is sent back into the original chat conversation. After a recipient signs the contract, it is recorded on PactSafe's consent management tool.

Competition: To date, there is no direct competition to PactSafe's Chat-to-Sign application. But there are many other legal tech companies in the market who offer similar contract drafting solutions. Thomson Reuters' Contract Express and AbacusNext, which acquired document automation company HotDocs in late 2017, for example, are well known in the contract drafting space.

Others also offer similar solutions for different types of legal users. On-demand legal service providers Rocket Lawyer and LegalZoom have automated contracting tools for legal consumers, for instance, while Litera Microsystems launched a contract drafting tool for legal departments and law firms in early 2018.