Executed as a Deed vs Agreement: Understanding the Differences
When it comes to legal contracts, there are two common types: executed as a deed and agreement. These two types differ in terms of their legal requirements, enforceability, and use. In this article, we`ll explore the key differences between executed as a deed and agreement, and when it`s appropriate to use each.
Executed as a Deed
An executed as a deed is a formal legal document that requires certain formalities to be fulfilled before it can be considered valid and enforceable. It must be in writing, signed by the parties involved, and witnessed by a third party who is not a party to the agreement. The third-party witness must also sign the document and provide their name and address.
One of the significant features of an executed as a deed is its ability to have a longer limitation period than an agreement. A limitation period refers to the time frame within which a legal claim can be made. With an executed as a deed, the limitation period can be up to 12 years, whereas with an agreement, it is only six years.
Executed as a deed is often appropriate in cases where a party is:
– Giving or receiving a guarantee or indemnity
– Transferring ownership of a property
– Creating a trust or settlement
– Entering into a power of attorney agreement
An agreement, on the other hand, is a legally binding document that sets out the terms and conditions of a transaction or arrangement between two or more parties. Unlike an executed as a deed, there are no formalities required for an agreement to be valid – it can be made verbally or in writing.
The limitation period for agreement is up to six years, unlike an executed as a deed, which can have a limitation period of up to twelve years.
Agreement is often appropriate in cases where a party is:
– Entering into a commercial contract
– Negotiating terms of a relationship
– Agreeing to provide or receive services
When to use Executed as a Deed vs Agreement
Choosing between an executed as a deed and agreement will depend on the nature of the transaction or arrangement. As a general rule, executed as a deed is more appropriate when the document is of a more significant or complex nature, such as the transfer of property ownership or the creation of a trust. Agreement is more appropriate for less complicated transactions, such as service agreements or commercial contracts.
In summary, an executed as a deed and agreement are two types of legal documents used in transactions and arrangements between parties. The key differences between the two are the formalities required to make them valid and enforceable, and the limitation periods for legal claims. Understanding these differences is crucial in ensuring the appropriate legal document is selected for each transaction.