Execution and formalities - Deeds, witnessing, and company e...

Learning Outcomes

By the end of this article, you will be able to identify the formal legal requirements for executing deeds, understand witnessing and delivery, and apply correct signing procedures for individuals and companies in England and Wales. You will be able to distinguish between deeds and simple contracts, explain company execution options, and spot frequent exam pitfalls relating to invalid execution.

SQE2 Syllabus

For SQE2, you are required to understand the execution of deeds and contracts, particularly in commercial law, property, and business contexts. Pay particular attention during revision to:

• the statutory requirements for valid execution of a deed by individuals and companies
• the rules on witnessing signatures and the role of the witness
• the different ways a company can execute a deed, with or without a seal
• requirements for delivery of a deed
• common errors and exam pitfalls regarding execution and witnessing

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following statements best describes the witnessing requirement for a deed executed by an individual?
   1. The individual may witness their own signature
   2. The individual must sign in the presence of a witness who is not a party to the deed
   3. The deed need not be witnessed
   4. Any family member can witness, even if they are a signatory
2. How can a private limited company execute a deed without using a company seal?
   1. By having a director sign in the presence of a witness
   2. By having two directors sign
   3. By having one director and the company secretary sign
   4. All of the above

3. What does "delivery" of a deed refer to in legal practice?

4. When must a deed not be treated as validly executed?

Introduction

Execution and formality requirements for deeds and company documents are essential in commercial and property law. Deeds are used for transactions needing greater legal formality than a simple contract and errors in execution render documents void or unenforceable. In exam scenarios, knowing the precise rules for signatures, witnesses and delivery is essential.

What is a Deed?

A deed is a special legal document used to perform or confirm a particular act, such as a transfer of land or the granting of a power of attorney.

Key Term: Deed
A document that takes effect as a deed when it is executed using the required formalities, is clear on its face that it is a deed, and is delivered as a deed.

Formal Requirements for a Valid Deed

The core statutory requirements for a valid deed in England and Wales are set out in the Law of Property (Miscellaneous Provisions) Act 1989 and (for companies) the Companies Act 2006.

A document will only take effect as a deed if:

• It is clear on its face that it is intended to be a deed (e.g. by words such as “executed as a deed”)
• It is validly executed according to the rules for the party signing (individual or company)
• It is properly delivered

Key Term: Delivery (of a deed)
An act showing intent for the deed to become effective, usually by signing, but may be deferred or conditional.

Formalities for Execution by Individuals

For an individual (including sole traders and partners):

• The individual must sign the deed in the physical presence of a witness who attests (signs to confirm) the signature.
• The witness must not be a party to the deed.
• The same rules apply if someone else signs at the direction of the individual.

Key Term: Attestation (by a witness)
The formal act of a witness observing a signature and then adding their own signature to confirm they saw it.

Key Term: Witness
An independent adult (not a party) who observes another’s execution of a deed and signs as evidence.

Formalities for Execution by Companies

Under s.44 Companies Act 2006, a company has several ways to execute a deed:

• By affixing the company seal (if it has one), in the presence of two authorised persons (usually directors or secretary)
• Without a seal, by signature in any of the following ways:
  • By two directors
  • By one director and the company secretary
  • By a director signing in the presence of a witness who attests the signature

If these requirements are not met, the deed is not validly executed.

Key Term: Company Seal
An official stamp bearing the company’s name, historically required for deeds but now often optional.

Delivery of a Deed

A deed does not take effect until delivered. Delivery is not just physical handing over; it is an act showing the signatory intends to be bound. This may happen by custom upon signature, but can be delayed (e.g. held in escrow until conditions are met).

Key Term: Escrow
When a signed deed is held by a third party and only delivered (made effective) once certain conditions are satisfied.

Witnessing a Deed

For both individuals and company execution by one director, an independent adult (preferably no family or interested party) must be physically present to watch the signature and then add their own details. Electronic signatures of witnesses are permitted where all parties are present simultaneously via electronic means, but the witness must still actually observe the signing.

Worked Example 1.1

You are acting for Alice, who wants to execute a deed of guarantee as an individual. Her husband is also a beneficiary of the deed. May he act as her witness?

Answer:
No. The witness should be an independent adult, not a beneficiary or party to the deed. Her husband cannot act as witness in this scenario.

Worked Example 1.2

Beta Ltd is executing a deed without a seal. It is signed by one director in the presence of a witness. The witness is also a company employee and a party to the deed. Is the deed valid?

Answer:
No. A party to the deed cannot act as witness to its execution. The employee’s status as a party invalidates the attestation.

Signing on Behalf of Others

A person may sign a deed on behalf of another (e.g. under a power of attorney) but must follow the correct formalities for witnessing as if the principal signed personally.

Key Term: Power of Attorney
Authority given formally (often by deed) to act and sign on behalf of another.

Exam Warning

Where exam scenarios involve missing or improper witnessing, incorrect signatories, or absent delivery, the deed will be invalid. Read all case facts for the specific execution route and strict formal requirements needed for each party.

Common Pitfalls and Best Practice

• Each signature must be witnessed at the time of signing; “pre-witnessed” signatures or remote witnessing (except where all required criteria for e-signatures/witnesses are met) are not permitted.
• A deed signed only by one director, without witnessing, is not valid company execution unless a seal is used (which is rare for modern companies).
• Always check whether specific statutory requirements override these general rules, especially in land or property matters.

Worked Example 1.3

You act for a private company signing a deed. The document is signed by one director only, with no witness and no company seal. Is the deed validly executed?

Answer:
No. Under s.44 CA 2006, the deed is not valid unless it is signed by (1) two directors, (2) one director and the secretary, (3) one director in the presence of a witness, or (4) under seal.

Key Point Checklist

This article has covered the following key knowledge points:

• There are specific statutory requirements for execution and witnessing of deeds by individuals and companies.
• Deeds must state they are deeds, be signed according to required formalities, and be delivered.
• Individuals must sign in the presence of a witness who is not a party.
• Companies may sign using two authorised officers, by one with a witness, or (less commonly) using a company seal.
• Delivery is essential for effectiveness, and may be immediate or conditional (escrow).
• A party to the deed or family member should never be the witness.
• Mistakes in execution or witnessing can render a deed void and unenforceable.

Key Terms and Concepts

• Deed
• Delivery (of a deed)
• Attestation (by a witness)
• Witness
• Company Seal
• Escrow
• Power of Attorney