When is a deed enforceable

To ensure that the guarantee is binding even though there is no consideration, the guarantee is often in the form of a deed. There are also specific documents which are required by legislation to be executed in the form of a deed. For example, in some Australian States, conveyances of land are void for the purpose of conveying or creating a legal estate unless made by deed. Traditionally, in order to be a deed at common law, an instrument needs to comply with a number of formalities:.

Today, parchment and vellum are more the domain of wedding planners and scrapbookers and the execution of deeds is now dealt with under legislation in each Australian State, for example, Part 6 of the Property Law Act Qld deals with the execution of deeds under Queensland Law. Section 45 states that an individual may execute a document as a deed if:.

Section 46 deals with the execution of deeds by corporations under seal, by agent and by a person authorised under a power of attorney, while section 47 deals with the requirement of delivery defined as the intention to be legally bound under section 47 3. The execution of a document in the form of a deed does not itself imply delivery unless it appears that execution was intended to constitute delivery delivery can be inferred from any fact or circumstance, including words or conduct.

In George Street Qld Pty Ltd v BG International Ltd, the Court of Appeal decided that the execution of the deed instrument by a proposed tenant did not constitute delivery because they only intended to be bound once all the parties executed the deed, which had not occurred in this case. By contrast, the Court of Appeal decided in In Roma Pty Ltd v Adams [] QCA that execution was intended to constitute delivery because the party relying on the document did not wait until the counterparty had executed the deed before sending the signed forms necessary for registration.

This case also differs from George Street Qld Pty Ltd where negotiation was subject to a "mutually agreed legal document by both parties". The Corporations Act Cth also deals with the execution of deeds by bodies corporate.

Accordingly, the settlement deed was presumed to have been delivered when executed. Furthermore, the deed was unaffected either by the alleged non-disclosure of material facts or by the parties' subsequent discussions. The non-disclosure was not in breach of the Civil Procedure Rules, nor was it fraudulent.

There was no relationship of trust between the parties such that non-disclosure would amount to a breach of fiduciary duty. The further discussions were merely that; discussions between parties who were, at that stage, in dispute over whether or not a binding settlement had been concluded between them.

No further binding agreement had been reached during the discussions. When executing deeds, always remember that what matters most is not signing or dating, but delivery.

If you are executing a deed which you do not intend to become fully effective immediately, ensure that you clearly state to the other parties preferably in writing any conditions attaching to delivery. In most cases, it will be sufficient for the deed to contain a provision stating that the parties do not intend delivery to take place until they insert the date of the document. At the very least, it can be agreed that a deed executed by one party is sent to the other party on condition that it is held to the order of the first party until both parties agree that it comes into force.

In practice, very similar issues will arise in relation to ordinary contracts; always be clear about when they are intended to come into effect, regardless of signing and dating. A specific issue can arise in relation to mortgages and charges executed by companies. Particulars of these must be delivered to the Registrar of Companies within 21 days of being created.

If they are not, the security is rendered unenforceable against a liquidator, administrator or creditor of the company. In addition, the company and defaulting directors face fines. It is sometimes overlooked that the 21 day period starts to run as soon as the mortgage or charge is executed if it is not made clear that delivery is not to occur until later , even if this is done in advance of the document being dated.

Signed, sealed and delivered: the deed is done. Share Page Did you find this article informative? Join our mailing list Sign up. Leave feedback Contact Us. Sectors and Services featured in this article. Corporate and commercial. Company law and corporate governance. Disputes and litigation. LLPs need to abide by the same rules as those for companies, but their authorised signatories will be members.

Delivery does not occur when the document is physically moved, but when it is clear that the parties intend to be bound by the deed. In practice, the deed will state that it is delivered when dated. Take care and satisfy the formalities When arranging for a deed to be executed, care must be taken by all of those involved to satisfy the formalities. Subscribe for your tailored weekly newsletter Your newsletter will be curated based on the topics that you've told us you're interested in and you can change what you receive in future updates at any time and as frequently as you need.

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