Execution of Deeds and Contracts [21] Flashcards
Execution of Deeds and Contracts
What is a deed? [1]
Execution of Deeds and Contracts
What statutory source sets out the requirements for a valid deed? [1]
Section 1 Law of Property (Miscellaneous Provisions) Act 1989
Execution of Deeds and Contracts
What are the requirements for a valid deed? [7]
Per the common law and s.1 Law of Property (Miscellaneous Provisions) Act 1989 the requirements for a valid deed are:
- A deed must be in writing (n.b. this is the common law requirement).
- Face value requirement. It must be clear from the face of the instrument that it is intended to take effect as a deed (s.1(2)(a), LP(MP)A 1989).
- Validly executed as a deed. The instrument must be validly executed as a deed by the person making it or, as the case may be, by one or more of the parties to it (s.1(2)(b), LP(MP)A 1989).
- N.B. In relation to signature, per s.1 LP(MP)A 1989, a deed will be validly executed as a deed by an individual if it is (1) signed in the presence of a witness who attests the signature; or (ii) signed at the individual’s direction and in his presence and the presence of two witnesses who each attest the signature
- Delivery. A deed must be delivered. Although this was historically a common law requirement, there have been some statutory modifications of the rule (for example, s.1(1)(c), LP(MP)A 1989 and s.46(2), CA 2006). At common law, a deed is ‘delivered’ when a party expresses an intention to be bound by the deed, even if it retains possession of the document.
Exeuction of Deeds and Contracts
True or false: ‘a party to a deed cannot be an attesting witness?’ [1]
True (Freshfield v Reed (1842) 9 M&W 404 and Seal v Claridge (1881) 7 QBD 516).
Subject to the rule that a party to a deed cannot be an attesting witness, note that there is no legal requirement for a witness to a deed to be either independent or disinterested. For example, there is no prohibition on a signatory’s spouse, cohabitee or civil partner from acting as a witness.
Execution of Deeds and Contracts
True or false: ‘There is no apparent prohibition against a minor acting as a witness.’ [1]
True
N.B. However, it is generally advisable to avoid this, or at least to ensure that any minor who acts as a witness is of sufficient maturity and understanding for their evidence to be regarded as reliable should it later prove necessary to verify the circumstances surrounding the execution of the deed.
Execution of Deeds and Contracts
Does a witness to a deed need to be physically present? [1]
Yes.
It is a statutory requirement both under s.1(3) LP(MP)A 1989 and s.44(2)(b) Companies Act 2006 that the maker of a deed executes it in the presence of the witness.
It is generally considered that these provisions require the physical presence of a witness when the deed is signed (Freshfied v Reed and Ford v Kettle (1882) 9 QBD 139, 144 to 145).
This position is supported by paragraph (8) of the statement of law set out in the Law Commission’s 2019 report on the electronic execution of documents.
Execution of Deeds and Contracts
Must the executing party and witness sign contemporaneously? [1]
Yes (but note the below)
As the witness must be physically present when the executing party executes the deed, it is usual practice for the witness to sign the deed at the same time as the executing party. However, provided that the deed was actually executed in the presence of the witness, there is some authority to suggest that the addition of the witness’s signature to the deed at some point subsequent to its execution by the executing party may not render the deed invalidly executed.
Execution of Deeds and Contracts
A contract signed in escrow means that parties to that instrument sign it (typically in counterpart) but on the condition that it is not dated until certain conditions are met, e.g. all counterparts are signed and final confirmatory instructions are given.
Can a deed be executed in escrow? Is an escrow revocable before the escrow conditions are met? [1]
Yes.
A deed may be delivered so that it does not take effect as a deed unless and until certain conditions are fulfilled.
Strictly speaking, such an instrument is known as an ‘escrow’ rather than a deed until those conditions are fulfilled, but the process is commonly referred to as the execution or ‘delivery of a deed in escrow’. Where an instrument is delivered in escrow, it is common commercial practice to agree in the escrow conditions that the document will be dated and become effective on the satisfaction of the conditions, and therefore on its release from escrow.
Note, however, that this practice is inconsistent with judicial authority that a deed takes effect from delivery (see Alan Estates Ltd v W G Stores [1982] Ch 511 CA and Johnsey Estates (1990) Ltd v Newport Marketworld Ltd and others, 10th May, 1996 (unreported)).
When a document has been delivered, subject to any escrow conditions, it is irrevocable and cannot be withdrawn or recalled by the maker (Beesly v Hallwood Estates Limited [1961] Ch 105).
Execution of Deeds and Contracts
What is meant by a witness ‘attesting’ a signature? [1]
While there are some conflicting older authorities as to what constitutes attestation, it is generally accepted that in the context of executing a deed, attestation involves two elements:
- The witness oberserving the document being signed by the signatory/signatories; and
- The subscription of the witness’ signature following a statement (commonly referred to as an ‘attestation clause’)
- *that the document was signed or exected by the maker of the deed in the presence of the witness**
N.B. as a matter of convention, it is also usual practice for the witness to print their name, address and occupation in the attestation clause, in addition to their signature.
Execution of Deeds and Contracts
What is meant by the ‘delivery’ of a deed? [1]
- Delivery fixes the date from which the party/parties excuteing it is bound by the deed
- Once ‘delivered’, it is irrevocable in the absence of an express right of revocation
- At common law, a deed is delievered when a party expresses an intention to be bound by it, even if that party retains possession of the document. This is usually achieved by having clear wording in the document setting out that the deed will be delivered on the date appearing at the head of the document.
Execution of Deeds and Contracts
Complete the blanks: ‘Where companies are subject to the CA 2006, contracts can be signed on behalf of the company by [**********]’ [1]
‘Where companies are subject to the CA 2006, contracts can be signed on behalf of the company by any [ANY PERSON WITH EXPRESS OR IMPLIED AUTHORITY TO DO SO]
(s. 43(1)(b) CA 2006)
Execution of Deeds and Contracts
What section of the Companies Act sets out how contacts can be validly executed on behalf of a company that is subject to that act? What does it say? [1]
Section 43 CA 2006‘Company Contracts’ sets out that a company may execute a contract by a company (i) by writing under its common seal; or (ii) on behalf of a company, by a person acting under its authority, express or implied.
(N.B. this section really just states WHO can enter into company contracts, rather than HOW to make them which is covered by s.45 CA 2006)
Execution of Deeds and Contracts
What two primary options are there for a company that is subject to the CA 2006 to validly enter into a document (or DEED)? [1]
Under s.44 CA 2006, a document is validly executed by a company:
- by affixing its common seal; or
-
by signature, in accordance with the following:
- signed by two authorised persons (directors/secretary);
- signed by a director in the presence of a witness who attests the director’s signature
Execution of Deeds and Contracts
Can an attorney appointed by deed execute deeds or other documents on behalf of a company? [1]
YES - either generally or in respect of specified matters. s.47 CA 2006
Execution of Deeds and Contracts
Can contracts and deeds be signed electronically? [1]
Yes, the Law Commission stated in 2019 that as long as the person signing intends to do so and any other execution formalities are met - including witnessing requirements
However the current view is still that deeds must still be signed in the physical presence of a witness.
