Executing deeds – some dos and don’ts

Deeds are one of the most commonly used documents in the construction industry. This is perhaps not surprising given the benefit the parties derive from the extended limitation period of 12 years. However, the parties will only get the benefit of a deed, if the deed has been validly executed.

We have set out below some helpful dos and don’ts to be mindful of when executing deeds. 

DOs

Before executing a deed check that:

• The applicable execution formalities have been complied with, which will vary depending on the nature of the company (LTD, LLP, LP, Partnership);
• The relevant signatories have the requisite authority to sign the deed. It is worth keeping in mind that in the context of signing a deed, a director means a statutory director. A director’s status can be checked through Companies House;
• All the appendices have been attached to the document, all necessary information has been filled in and there are no square brackets which otherwise could indicate that certain details are yet to be agreed;
• If opting to sign by complying with the formalities contained in s.44(2)(b) of the Companies Act 2006, the witness was physically present when the deed was executed; and
• There is a mutual agreement regarding the method of execution, either wet-ink or electronic, by counterparts or not.

DON’Ts

Once you receive the deed, it is essential that you do not:

• Date the deed unless explicitly instructed to do so;
• Sign it if you lack the relevant authority;
• Assume that the execution clause and blocks have been correctly inserted. These should be carefully reviewed and the signatories must be confident that these align with the correct procedure;
• Make any material manuscript amendments without the prior written consent of all the parties involved in the transaction; and
• Assume that there is no contract if the requirements of a valid deed have not been met. As long as the requirements for a simple contract are present, then the documents will take that form.

Lastly, it is worth noting that if anything has gone wrong during the execution process there are a couple of avenues to be explored:

• If the error is identified pre-completion, then you can correct it in manuscript with the prior written approval of the parties. The amendment should then be initialled by the person making the amendment. It is worth noting that clerical errors may not necessarily require prior approval in line with the decision in  Bank of Scotland Plc v Greville Development Co (Midlands) Ltd [2013] EWHC 983 (Ch), but it is best practice to do so;
• If the error is identified post-completion, a deed of variation will need to be agreed between the parties.