Part one – individuals
During the lifetime of a construction project you are likely to be provided with a number of agreements /contracts which need to be signed on your behalf. But what are the implications of how an agreement is to be signed and who should sign it?
For an individual with capacity, the normal procedure for signing contracts under hand would be for an individual to sign and date the document. The full name of the individual should be stated.
However, contracts can also be executed as a Deed. A key difference is the limitation periods. A Deed gives rise to a twelve year limitation period. A contract signed under hand will have a six year limitation period.
Deeds can be beneficial where there is only one party receiving a benefit under the agreement to avoid an agreement which is void for lack of consideration.
When entering into Deeds four main rules should be followed to ensure that the Deed is valid and enforceable:
- the Deed should be in writing
- it must be clear that the document is and is intended to be a Deed
- the execution wording should reflect the specific type of legal entity executing the Deed
- the Deed must be ‘delivered’ to take effect. This is the date which fixes when the parties are bound by the terms of the Deed. Delivery may be unconditional or conditional. Once a Deed is delivered it is irrevocable. Deeds must not be back dated.
Individuals execute (sign) Deeds in the presence of a witness, who attests the signature. A witness cannot already be a party to the deed and an individual cannot act as their own witness.
On a practical note, you should check:
- that the execution wording reflects that the party is an individual and that the full name is inserted
- the full details of the witness including full name, address and occupation are included.
Above all else, make sure that you know what you are signing. Because as a general rule ignorance is no defence, if you execute a document without reading it you will still be bound by its terms.
We will look at the requirements for companies in part two. For more information, email firstname.lastname@example.org.