I recently came across this great article written by Stuart MacGregor of Clayton Utz regarding the differences between Deeds and Agreements.
The article itself can be read in its entirety according the Clayton Utz website in 5.5min. However for those followers who are even more time poor, I thought I’d share some of the more concise concepts.
Interestingly, a Deed is a specific instrument used to document a binding promise or commitment to do something. Ordinarily this is a promise between the parties of the Deed to do something for the benefit of each other. This promise or commitment is given without the requirement for consideration to be given in order for the deed to be binding.
Some examples of typical Deeds include:
• Escrow Deed;
• Confidentiality Deed; and
• Indemnity Deed.
Further, a Deed becomes binding on each party upon signing and is not subject to the concept of offer and acceptance. Rather, a Deed is binding on an executing party when it has been “signed, sealed and delivered” to the other party(s) to the Deed, even if the other party(s) have not yet executed the Deed document.
For an Agreement to be binding on the other hand there must be:
• offer and acceptance;
• an intention to be legally bound; and
The article expands upon each of the above points and references examples with applicable case law references. All in all it make for an interesting read and the full article can be found here