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There appears to be a practice (particularly with compromise agreements) whereby one party purports to execute a document as a deed and the other party executes the document as a simple contract. My understanding is that a document cannot take effect as a deed for one party, and a simple contract for the other.
Section 45 states that an individual may execute a document as a deed if: the individual signs the document. The document is expressed to be an “indenture”, “deed” or be “sealed”. And. The document is signed and attested to by at least one witness not being a party to the document.
When a person “executes” a document, he or she signs it with the proper “formalities”. For example: If there is a legal requirement that the signature on the document be witnessed, the person executes the document by signing it in the presence of the required number of witnesses.
A deed is a written document which is executed with the necessary formality (that is, more than a simple signature), and by which an interest, right or property passes or is confirmed, or an obligation binding on some person is created or confirmed. Deeds are generally enforceable despite any lack of consideration.
Deeds are required by law in certain circumstances. For example, transfers of real estate and powers of attorney must be made by deed. Deeds can also be advantageous even when they are not strictly required by law. However, a deed requires some additional execution formality beyond a simple signature.
The underlying theory is that a deed is intended to create a 'solemn promise' by one party to another, whereas a contract is more in the nature of a bargain between two parties. (Having said that, a deed is often used by businesses to exchange something of value in the same way as a contract).
Deeds can also be advantageous even when they are not strictly required by law. For example, if only one party under a contract is receiving a real benefit from an agreement, it would be advisable under English law to execute the contract as a deed so that it is not void for lack of consideration.
Deeds must be in writing and will typically be executed in the presence of a witness, although in the case of a company a deed may be executed effectively by two directors or a director and the company secretary. Specific wording should also be included above the signature blocks.
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