Deed and agreement are common terms in English law, and they often seem interchangeable to laypeople. However, there are some significant differences that are worth understanding if you`re involved in legal dealings.
Firstly, what is a deed? A deed is a legal document that creates an obligation or transfers an interest or right. Unlike an agreement, a deed requires a certain formality to be valid. It must be in writing, signed, and delivered. The person signing the deed must intend to be bound by it, and it must be attested or witnessed. These formalities make a deed more solemn and binding than an agreement.
An agreement, on the other hand, is a less formal document that sets out the terms of a deal or arrangement between two or more parties. It can be either written or oral, and doesn`t require the same formalities as a deed. It`s important to note that an agreement can still be legally binding, but it may be more difficult to prove than a deed if a dispute arises.
One of the key differences between a deed and an agreement is the issue of consideration. Consideration is a legal term that refers to something of value (usually money) that is given in exchange for a promise or agreement. In English law, a deed does not require consideration to be legally binding. This means that a person can make a promise or grant an interest without receiving anything in return, and the promise or interest will still be enforceable. An agreement, on the other hand, requires consideration to be legally binding. This means that both parties need to agree to exchange something of value in order for the agreement to be binding.
Another difference between a deed and an agreement is the time frame in which they can be enforced. A deed can be enforced for up to 12 years after it was signed or, in some cases, indefinitely. An agreement, however, can only be enforced for six years from the date the cause of action arose. This means that if you want to enforce an agreement, you need to act quickly, or you may lose your right to do so.
In summary, the main differences between a deed and an agreement in English law are their formality, consideration, and enforceability. A deed is a more solemn and binding document that does not require consideration and can be enforced for a longer period of time. An agreement is a less formal document that requires consideration and can only be enforced for a limited period of time. Knowing these differences can help you choose the right document for your legal dealings and ensure that your rights are protected.