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Like notaries, witnesses aren't generally required in order for a contract to be legally enforceable. However, each state may require special kinds of contracts (e.g., real estate deals, wills, and marriage agreements) to be witnessed by a third party in order to be binding.
Essentially, when an agreement or a contract is being executed, a witness is brought to physically observe the parties signing such agreement / contract. The presence of witnesses is required, to be able to confirm the identity of the parties signing the document and to ensure that no forgery took place.
A notary public seal and signature is accepted as a legal witness to almost any document in the United States. If you are able to choose between the two methods of witnessing a legal document, it is always best to go with the notary.
Witnessing of an agreement signed by an individual is prudent but not essential unless it is specifically required under law. However, witnessing (or some form of authentication) is recommended for evidentiary purposes.
The same witness may witness each individual signature, but each signature must be separately, attested (in other words the witness must sign and print their details as for the first names signatory to the deed). A party to the deed cannot witness the signature of another party to the deed.