Author Topic: What are the Differences Between a Deed and an Agreement?  (Read 2377 times)

Maliha Islam

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What are the Differences Between a Deed and an Agreement?
« on: December 31, 2018, 05:32:01 PM »
What are the Differences Between a Deed and an Agreement?


An agreement or contract must satisfy at least the following pre-conditions (there are others such as having legal capacity) to be valid and enforceable:

there must be an offer from one party that is accepted by the other party;
each party must have an intention to be legally bound; and
consideration must flow between the parties.


Deeds, to be valid and enforceable, must:

be in writing;
be signed;
be witnessed by at least one person who is not a party to the deed;
use wording to indicate that the document is a deed such as “this deed” or “executed as a deed” and “signed, sealed and delivered” in the execution clauses. The wording in the document needs to be consistent – it is not helpful to refer to an agreement and then use “signed as a deed” for the execution clauses;
be delivered to the other party or parties; and
be supported by evidence that the parties intended the document to be a deed and be bound by it.

Differences between Deeds and Agreements

Consideration is not required for a deed to be legally binding. Consideration is required for an agreement to be binding.
For consideration to be effective, it must flow with or after the agreement is made. Past consideration is not valid consideration for an agreement. Past consideration does not affect the validity of a deed.

A deed is binding on a party when it has been signed, sealed and delivered to the other parties, even if the other parties have not yet executed the deed document: Vincent v Premo Enterprises (Voucher Sales) Ltd [1969] 2 QB 609 at 619 per Lord Denning.
Each State has specific legislation dealing with the period of time in which a claims or actions can be commenced. Usually, a claim following a breach of contract/agreement must be commenced within 6 years of the breach occurring. There is a longer period of time to commence action following the breach of the terms of a deed. The particular time period depends on the law of the State (which is why it is important to have a jurisdiction clause in your deed). Those time limits are 12 years in Queensland, New South Wales, the Australian Capital Territory, the Northern Territory, Tasmania and Western Australia; and 15 years in South Australia and Victoria.