The Correct Execution of Documents

Execution is the formal process of signing a document. It is important that a document is correctly executed to ensure it is both valid and enforceable.

The first step to ensuring your document is executed correctly, is to be sure what the intent of the document is. Generally, written contracts can take two forms:

• A simple contract (or agreement under hand); or
• A deed.

Certain transactions require the written contract to be in the form of a deed so it is important to prepare your document with this in mind.

What distinguishes a deed from a simple contract?

A deed requires additional execution formalities beyond those required by a simple contract. If not correctly executed, the validity of the deed could be called into question. As well as the additional execution formalities, a deed must:

• be in writing:
• be clear that it is intended to take effect as a deed; and
• be correctly delivered as a deed.

The limitation period to bring a claim under a deed is also double the amount of time compared to a simple contract (twelve years, rather than just six).

Consider who is signing

How a document should be signed depends on the “legal personality” of who is signing. The most common “legal personalities” are:

• individuals;
  • in a simple contract, an individual (or someone acting under their authority) simply has to make their mark where indicated.
  • when signing a deed, an individuals signature must be witnessed.
• companies formed under the Companies Act 2006;
  • a simple contract must be signed:
    • by affixing the company seal;
    • on behalf of the company by a person with express or implied authority;
    • by two Directors or one Director and the Company Secretary; or
    • by one Director in the presence of a witness.
  • a deed must be signed:
    • by affixing the company seal, and signed by two Directors or one Director and the Company Secretary;
    • signed by two Directors or one Director and the Company Secretary; or
    • signed by one Director and witnessed.
• partnerships; and
  • a simple contract must be signed by a partner:
  • a deed must be signed:
    • by all partners, in the presence of a witness; or
    • signed by one or more partners with the authority to execute on behalf of the partnership and in the presence of a witness.
• limited liability partnerships (LLPs).
  • a simple contract must be signed:
    • by affixing the company seal;
    • signed on behalf of the LLP by a person with express or implied authority;
    • signed by two members; or
    • signed by two members in the presence of a witness;
  • a deed must be signed:
    • by affixing the company seal, and signed by two members;
    • signed by two members;
    • signed by own member, in the presence of a witness.

If a foreign company is signing, in order for their signature to be valid under English Law, the company must sign:

• by affixing its common seal;
• in a manner permitted by the local law applicable to the territory in which the company is incorporated; or
• by an authorised person, provided that the authorisation is granted in accordance with that local law.

Witnesses

Where a signature must be made in the presence of a witness there are rules regulating who can act as a witness.

A witness cannot also be a party to the document, but the witness does not necessarily need to be completely independent (i.e. the spouse of a signing party can witness). However, it is best practice to ensure that the signatory is independent in case the document is later questioned in court, as the witness’s relationship could be used to call their witness testimony into question.