Executing Deeds in Victoria
Deeds often record the passing or affirmation of an interest, right or property; or the creation of an obligation or undertaking. At common law, deeds must be written and signed on paper. However, legislation in each state has modified this position.
What is a deed?
A deed is a document which records a person’s binding promise or commitment to do, or not do, something.
Deeds often record the passing or affirmation of an interest, right or property; or the creation of an obligation or undertaking. For example, deeds are often used to convey proprietary interests, create confidentiality obligations or provide financial guarantees and indemnities.
Difference between a deed and a standard contract
Unlike a standard contract, a deed does not need to contain all of the elements of an agreement to be enforceable; offer, acceptance, intention and consideration are not required (there is no requirement that there be payment of some sort for what is being provided under a deed for it to be valid). For this reason, it is recommended to use a deed where there is no consideration, or the consideration being provided is unclear or uncertain, in return for a promise or commitment made by a party.
Also, statutory limitation periods for bringing a claim are longer under a deed. In Victoria, the limitation period for bringing a claim in relation to a deed is fifteen years; compared to a six-year limitation period for a claim for breach of a contract.
Execution requirements for individuals in Victoria
At common law, deeds must be written and signed on paper. However, legislation in each state has modified this position.
Deed execution requirements in Victoria are found in the Property Law Act 1958 (Vic) (Property Act). Under the Property Act, a deed must be signed, sealed and delivered for it to be binding. Each of these elements can be broken down as follows:
a) Signed: An individual “shall either sign or place his mark upon” the deed – see section 73 of the Property Act.
b) Sealed: Under section 73A of the Property Act, a deed must be “sealed”, which, traditionally, was a reference to a person affixing a wax or wafer seal, a rubber stamp or any other impression as a seal. However, physically sealing a deed is generally no longer needed in Australia and it is sufficient for a deed to be expressed to be sealed. For example, the words “signed, sealed, and delivered” on the execution clause will be sufficient to show that the deed has been sealed.
c) Delivered: “Delivery” in the context of a deed means that the person who has executed the deed intends to be bound by it.
Unlike other Australian states, the signing of a deed in Victoria does not need to be witnessed.
Execution of deeds by companies
The Corporations Act 2001 (Cth) (Corporations Act) deals with the execution of deeds by companies. Under section 127(3) of the Corporations Act, a company may execute a document as a deed provided the document is expressed to be “executed as a deed” and the document is signed by two directors or a director and a company secretary, with or without a company seal being affixed.
Electronic signing of deeds – recent changes to legislation
In Victoria, deeds may be signed electronically as a consequence of new legislation. In early 2021, the Electronic Transactions (Victoria) Act 2000 (Electronic Transactions (Victoria) Act) was amended to specifically allow deeds to be created in electronic form and to be signed, sealed and delivered by electronic communication.
Section 9 of the Electronic Transactions Act provides that a signature by electronic communication is valid if:
(a) a method is used to identify the person and to indicate the person’s intention in respect of the information communicated; and
(b) the method used was either:
i) reliable and appropriate for the purpose for which the electronic communication was generated or communicated, in light of all the circumstances, including any relevant agreement; or
ii) proven in fact to have fulfilled the functions described in paragraph (a), by itself or together with further evidence; and
(c) the person to whom the signature is required to be given consents to that requirement being met by way of the use of the method mentioned in paragraph (a), having regard to the fact that it is not a sufficient reason to refuse to give consent merely because a person proposes to use a method mentioned in that paragraph.
The business and commercial services team at Wisewould Mahony has extensive knowledge and experience with deeds and contracts. If you require our assistance, please do not hesitate to contact any member of our business and commercial services team.
