Contracts- Under Hand or By deed?

kronsington · 09-09-2009 2:29pm #1

Hi,

could anyone give me the benefits of executing a contract under seal as opposed to under hand? what are the risks involved of executing under hand ?

thanks,

K

Tom Young · 09-09-2009 5:02pm

Simply the length of time the limitation period which assigns to the form of the contract. I believe its 6 by hand and 12 by seal.

dermot_sheehan · 09-09-2009 6:56pm

Contracts by deed don't require consideration to enforce (you don't have to show the party seeking to enforce contributed something of value to the bargain).

Certain transactions must be by deed (e.g. land conveyances).

McCrack · 09-09-2009 8:02pm

Just to add that contracts made without consideration must be made under seal and specific contracts involving companies (any conveyance, any granting of a power of attorney and issuing co. share certs.) must have their seal impressed on the document.

Tom is right on the statute of limitations re right of action on a contract executed by hand or seal.

Maximilian · 10-09-2009 12:01pm

I always found the matter of seals somewhat curious.

Another document which is required to be executed under seal is a guarantee (or is it an indemnity - can't remember). I'm referring to individuals here, not companies.

The thing is, I'd say of maybe 50% of the guarantees I've ever seen, no seal is actually affixed or in some cases, became detached. Given that a lot of guarantees are being called in these days, I wonder what the ramifications are.

I may well be taking up a new job where I'm likely to see a lot of this, so I'm even more curious now. Anyone aware of any recent case law on the matter?

Tester46 · 10-09-2009 12:03pm

Tom Young wrote: »

Simply the length of time the limitation period which assigns to the form of the contract. I believe its 6 by hand and 12 by seal.

There is also the issue that deeds may have to be delivered to be effective whereas a simple contract does not.

kronsington · 10-09-2009 1:37pm

ok, thanks for all that

im just drafting up some call option agreements and have to make it clear on the face of the document that these documents are intended to be treated as deeds.

any advice on suitable wording for this? cheers

Tom Young · 10-09-2009 2:49pm

No. Go get a solicitor or a precedent from somewhere.

nuac · 10-09-2009 3:07pm

Call option agreements, even if they relate to a property transaction are not deeds. They require some thought. See a solicitor.

dermot_sheehan · 10-09-2009 5:20pm

Guarantees don't have to be under seal although doing so removes any issue as to consideration.

Guarantees must however be in writing (statutes of frauds)

Maximilian · 10-09-2009 8:24pm

gabhain7 wrote: »

Guarantees don't have to be under seal although doing so removes any issue as to consideration.

Guarantees must however be in writing (statutes of frauds)

The matter of consideration can be a bit iffy with Guarantees though.

Victor · 10-09-2009 10:10pm

Was there some statutory change recently about under seal?

dermot_sheehan · 10-09-2009 10:19pm

Land and Conveyancing Reform Act 2009

s. 62 sets out that land can only be conveyed by deed now

s. 64 sets out formalities of a deed

Contracts- Under Hand or By deed?

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