Executing a commercial contract: some FAQs

Does a contract have to be signed to be valid?
No. Contracts can be created informally. Often nowadays, for example, they can be created by an exchange of emails. Nonetheless, a signature helps avoid arguments about whether the parties intended to be contractually bound.

Should I execute the document as a deed?
Certain documents must be executed as a deed. These include transfers of land, grants of leases of more than three years, mortgages, releases, powers of attorney, appointments of trustees and gifts of tangible goods not accompanied by delivery.

It is also sensible to execute as a deed where it is not clear that consideration is passing, or to obtain the benefit of the 12-year limitation period (it is only six years for simple contracts)…

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