Signed, Sealed and Delivered – Executing a Deed or a Contract?

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A Deed is a common legal document that outlines a party’s promise to do something. The key difference between a Deed and a contract is that a Deed does not require consideration. Consideration is a legal term for something of value changing hands between the parties. Another important requirement for a Deed is that it must be executed in writing.

A common issue that arises for many legal documents is the validity of their signing and execution. In Victoria the Property Law Act 1958 (Vic) outlines the key factors required for a valid execution of a Deed.

For adequate execution of a Deed by an individual in Victoria, they will need to place a mark or sign upon the document.[1] Sealing this document alone will not be considered sufficient. Further, for the Deed to be fully executed, it must be “expressed to be sealed by that individual but not so sealed shall for all purposes operate and take effect as if it had been so sealed”.[2]  

Therefore for a Deed to be fully executed an individual must:

1. sign the document; and
2. expressly state the words “sealed” and “delivered” on the document.

Without the exact expression of the word “sealed” the Deed is not valid, and the document drafted would instead likely be considered a contract. This mistake may lead to future issues regarding the validity and enforcement of the document.

To bring a claim for damages for a breach of contract in Victoria, there is a strict time limit to do so within six years from the date on which the cause of action occurred.[3] However this is extended to 15 years in circumstances where the document breached is a Deed.[4]

There are significant differences in seeking damages between a Deed and a contract. This is an example of why it is important to have professionally drafted legal documents.

If you require any assistance in drafting a potential Deed or contract or would like an experienced legal team to review your legal documents to ensure your wishes are adequately reflected, please do not hesitate to contact our team members at Scanlan Carroll to assist you.

[1] Property Law Act 1958 (Vic) s 73(1).

[2] Ibid s 73A.

[3] Limitations of Actions Act 1958 (Vic) s 5(1)(a).

[4] Ibid s 5(3).