What is an Agreement and a Deed?
At its simplest, a deed is a promise that is not supported by consideration (payment). This means that to be valid, deeds must comply with much more specific requirements than contracts. You cannot simply infer the parties’ intentions to bound as you may be able to with a contract or agreement. This article explains the difference between an agreement and a deed.
Definition of a DeedA deed is a special type of binding promise or commitment to do something.
The essence of a deed stems from the need in every community to have a special type of ritual or procedure which publicly indicates the solemnity of a binding promise that a person intends to make.
In today’s commercial world, this idea of a serious commitment continues in the form of a deed. Therefore people use a deed when substantial interests are at stake, such as when a person passes an interest, right or property.
The Difference Between an Agreement and a DeedThe fundamentals of contract law are that there must be:
offer and acceptance;
an intention to be legally bound; and
consideration.
Consideration stems from the idea that when two parties agree, they have reached a bargain. The parties need consideration to show that they have ‘bought’ the promise by doing some act or providing something in return for the promise.
In contrast with a contract or agreement, there is no requirement for consideration for a deed to be legally binding. A deed does not need consideration because of the idea that a deed is the most solemn indication that the parties intend to be bound.
Common Types of Deeds deed of termination;
escrow deed;
financial guarantee or letter of credit;
deed poll;
indemnity deed; and
confidentiality deed.
Source:https://legalvision.com.au/difference-between-agreement-and-a-deed/
