Smart Counsel

Execution of Documents

Key differences between deeds and agreements

The legal rules that apply to the execution of documents (and that ultimately determine whether an executed document is legally enforceable) depend on:

  • whether the document is a deed or an agreement; and
  • the type of person signing the document (i.e. a company or a natural person).

There are different rules for each type of document and each type of person. For example, unlike ordinary agreements, deeds executed by natural persons will generally need to be witnessed, a condition imposed by statute rather than common law (a point noted in Brown v Tavern Operatory Pty Ltd [2018] NSWSC 1290). Further, deeds only take effect when they are delivered (a legal concept focusing on when a party signing a deed intends to be bound) rather than simply executed.

The different legal rules are discussed in detail in the sections on:

Deeds and agreements are both ways in which a ‘deal’ can be committed to writing by negotiating parties. Used in this way, deeds share many similarities with agreements, including how they are interpreted, varied and discharged. The remedies for breach are also similar.

However, there are important differences between deeds and agreements. One important difference is that a party seeking to enforce a promise made to it in an ordinary agreement (whether written or oral) must have provided consideration for the promise. Consideration is not necessary if the promise is contained in a deed.

For example, a third party guarantee of a loan will ordinarily be made by deed if the guarantor does not receive any consideration from the lender for guaranteeing the loan to the primary borrower (unless the consideration is construed as being the benefit of the lender continuing to advance funds to the borrower, who the guarantor has an interest in supporting). If the guarantee is executed as a deed rather than an agreement, any dispute about lack of consideration is avoided.If the guarantee was executed as an agreement, the result could be that the contract is held to be unenforceable for due to a lack of consideration.

Although consideration is not strictly necessary if a promise is contained in a deed, it is still common for at least a nominal amount of consideration to be included in deeds where there is otherwise no consideration. This is because of the rule that equity will not assist a volunteer. The effect of that rule is to bar recourse to equitable remedies such as specific performance if there is no consideration given for a promise that is received.  Nominal consideration can be provided for with a term to the effect that ‘Party A agrees to pay Party B the sum of $10.’

Another important difference between deeds and agreements is that deeds have a longer limitation period, being at least double that for a breach of an agreement in all Australian jurisdictions.

The use of deeds can also be more complicated than the use of agreements due to additional requirements which may be imposed by law as to their execution (for example, requirements for deeds to be sealed and witnessed in certain jurisdictions) or when they take effect. A deed takes effect when it is ‘delivered’ not when it is executed, delivery being a legal concept which is centred on the signatory intending to be bound rather than physical delivery. There are also greater restrictions on how a party can enter into a deed via a representative than exist with an agreement.

Deeds are typically used instead of agreements in the following circumstances:

  • where there is, or may not be, consideration for the promise. For example, confidentiality agreements are often entered into in the form of a deed where there is a concern that the person receiving a confidentiality undertaking does not provide any consideration for doing so;
  • where a longer limitation period is sought;
  • because of the ritual or gravitas of using a deed: a deed has been defined as the most solemn act a person can perform with respect to a piece of property or other right. Deeds are a creation of the common law, dating back to around 700AD. In many instances parties prefer to use deeds rather than agreements because they are symbolic of the importance of the transaction as opposed to for any legally significant reason; and
  • where statute requires it. For example, when conveying old system titles (non-Torrens system), deeds are required.

When should a deed be used, rather than an agreement?

Deeds are typically used instead of agreements in the following circumstances:

  • where there is, or may not be, consideration for the promise. For example, confidentiality agreements are often in the form of a deed if there is a concern that the person receiving a confidentiality undertaking does not provide any consideration for doing so;
  • where a party seeks a longer limitation period;
  • because of the ritual or gravitas of using a deed;: a deed has been defined as the most solemn act a person can perform with respect to a piece of property or other right. Deeds are a creation of the common law, dating back to around 700AD. In many instances parties prefer to use deeds rather than agreements because they are symbolic of the importance of the transaction as opposed to for any legally significant reason; and
  • where statute requires it. For example, when conveying old system titles (non-Torrens system) to Torrens title, deeds are required.

What is split execution?

Split execution of a document arises when two officers of a company execute a document, or witness the affixing of the company’s seal, for the purposes of sections 126 or 127 of the Corporations Act 2001 (Cth) on different but identical copies of the document, usually because they are in different places. Split execution is a valid method for executing the document under ss 126 or 127, subject to the signatories complying with procedural requirements as set out in s 110A of the Corporations Act.

Electronic Execution

An electronic signature or eSignature is a term used to describe a class of methods for electronically replicating or replacing a physical signature (a physical signature is sometimes called a ‘wet signature’ referring to the use of ink and to distinguish it from an eSignature).

There are many ways in which an eSignature can be created, including:

  • scanning a paper signature and inserting it in an electronic document (or multiple documents over time);
  • clicking on an “agree” button on a website;
  • signing using a digital pen, finger or a mouse onto a trackpad;
  • typing your name; or
  • using specific electronic signing tools such as DocuSign or Adobe Sign, which use an web-based authentication system to affix an electronic version of your signature to a document.

For natural persons, generally there is no legal requirement that an agreement be signed (or even that it be in writing) and therefore there is no legal impediment to using an eSignature.

Similarly, many contracts are made online simply by selecting an ‘I agree to these terms and conditions’ checkbox and paying by credit card. There is no question that contracts of that kind are legally valid and enforceable.

However, there are certain types of agreements that must be in writing and/or signed in order to be legally binding. These include contracts for the sale of land, certain building contracts and unsolicited sales contracts. In those cases, the use of eSignatures will only be possible if:

  • expressly authorised in the relevant legislation governing the transaction – this is very rare (one example being the electronic execution of a security agreement under the Personal Property Securities Act 2009 (Cth));
  • authorised by implication under the relevant legislation governing the transaction – however, this basis of validation is very uncertain and we do not advise relying on it; or
  • the electronic execution complies with the relevant Electronic Transactions Act which applies in the jurisdiction selected by the parties to govern their transaction (there is an Electronic Transactions Act with almost identical provisions in each state and territory, as well as at Commonwealth level).

If an eSignature is used in one of these cases, we recommend the following:

  • use a sophisticated e-signature tool which is in regular commercial use and has a sound reputation;
  • to maximise security, use additional available authentication options, such as two-factor authentication by a phone code or message;
  • advise the counterparty in advance that you intend to execute the agreement electronically; and
  • be as vigilant in reviewing a counterparty’s eSignature as you would be for any other signature. If something seems suspicious or unusual, it should be promptly investigated.
Top

Electronic signatures are currently permitted as set out in the table below.

We summarise if and how agreements and deeds may be electronically executed and witnessed within Australia. The table refers to execution by Australian companies only. Click here to access the table.  

Top

G+T Execution App

To create a legally binding deed or agreement, a correct execution block for each party is essential. Use the G+T Execution App to find the right execution blocks for your documents.

Easy to use and with detailed notes and commentary throughout, the G+T Execution App can be accessed by clicking on the icon below. For best use, access this on your desktop computer rather than from a mobile device.

Execution of deeds

Documents intended to be in the form of a deed should be expressed throughout to be a deed rather than an agreement. For executing agreements instead of deeds, please refer to the Execution of Agreements section.

While the courts take the view that a document can still be classified as a deed even if it is not expressly stated to be a deed, with the parties’ intention for a document to be a deed able to be inferred from all the surrounding circumstances (see the recent cases of Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [67]-[68] and Bendigo and Adelaide Bank Ltd v DY Logistics Pty Ltd [2018] VSC 558, [23]), to avoid any doubt, the document should be expressed to be a deed, including by inserting confirmatory words such as “Executed as a deed” above the execution block.

Sealing

Execution blocks used in a deed must state that the document is a deed and that it is sealed. The purpose of these statements is to engage statutory provisions which deem the document to be sealed when this language is used. It is therefore not necessary to actually seal the deed when using this execution block.

Delivery

A deed will take effect from the time it is delivered rather than when it is dated or executed. ‘Delivery’ does not mean physical delivery but rather the point at which the executing party intends to be bound. Whether the party has evinced an intention to be bound immediately is a question of fact to be determined objectively, looking to the words and conduct of the party and the circumstances surrounding that party’s execution of the deed (as stated by Blackburn J in Xenox v Wickham (1867) LR 2 HL 296 at 312).

If a deed is expressed to be “signed and sealed” by a party to it (for example, when such words are used in the execution block that the party uses to sign the deed), then there is a common law presumption that the deed has also been delivered when the party so signs and seals that deed (Hall v Bainbridge (1848) 12 QB 699). A similar presumption arises if the deed is expressed to have been “signed sealed and delivered” by that party, given that the party has used words (“delivered”) and actions (the act of signing and sealing) to indicate their intention that the deed be delivered (Wardley Australia Ltd v McPharlin (1984) 3 BPR 9500). This is a rebuttable presumption, meaning that evidence can show that a party did not intend to be immediately bound and hence did not deliver the deed. 

This is ultimately a question of fact to be determined objectively in each individual case with reference to ‘the words and conduct of the executing party and the circumstances surrounding the execution of the deed’ – see the decision of the NSW Court of Appeal in Segboer v AJ Richardson Properties Pty Ltd [2012] NSWCA 253, [59]-[60], recently cited with approval in Realm Resources Ltd v Aurora Place Investments Pty Ltd [2019] NSWSC 379, [71].

There is no general presumption that a party intends to be immediately bound simply by executing a deed. Indeed, it is common for the surrounding circumstances to indicate an intention that the parties do not intend to be bound until all executed counterparts of a deed have been exchanged, and typically there is an express clause in the parties’ deed which provides for this.

A deed can also be delivered ‘in escrow’. Escrow is a form of conditional delivery, the condition being to delay the operation of the terms until the condition is satisfied. For example, a deed may be delivered in escrow for another party to sign.

With a delivery in escrow, the party that delivers the deed is bound by and cannot resile from the deed until the condition is fulfilled. However, if the condition is not fulfilled in the contemplated time then the party can seek equitable relief for the deed to be delivered up and cancelled.

Where there is any doubt about when delivery is to take effect (including the terms of any escrow), this should be explicitly stated, preferably in the deed itself.

Electronic signatures and electronic deeds

Refer to the Electronic Execution section regarding when electronic signatures can be used to execute deeds.

Do not pre-sign signature pages

Signature pages should never be ‘pre-signed’ and attached to a deed. Instead, the whole deed should be printed, the pages securely fastened and then the deed executed.

Stamp duty

Stamp duty may be payable on the execution of a deed. Consider seeking specialist tax advice.

Do not use these execution blocks outside Australia or where the laws of another country may apply

The execution blocks available in the G+T Execution App have been drafted for use within Australia only, and for deeds that are subject to Australian law. If the law of the deed is that of another jurisdiction and/or the deed is to be executed outside Australia, seek specialist advice.

The G+T Execution App provides an execution block for an individual to execute a deed. It should be used in conjunction with the important general notes regarding Execution of Deeds and the specific information below.

The signature must be witnessed

The execution block provides for the individual who is executing the deed to have their signature witnessed. The witness must be present when the deed is executed, whether or not electronic signatures are used.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria or Queensland, it is recommended that the requirement not be removed for Victoria or Queensland, as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories as a matter of statute as opposed to the common law – see Brown v Tavern Operator Pty Ltd [2018] NSWSC 1290.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed. Ideally a witness should not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Witnessing the signing of a deed may be conduct using real time audio visual technology such as Zoom or FaceTime where the governing law of the deed is New South Wales, Victoria, or Queensland law. There are strict procedural requirements if witnessing will be conducted using such technologies. Consider obtaining specialist advice if a witness and signatory propose to have the signatory’s signature remotely witnessed.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for an individual to execute a deed as an attorney. The execution block can be used for an individual executing a deed as attorney for either an individual or a company. It should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Attorney must be appointed by deed

You should review the authorising deed to ensure that it has been validly executed and that the attorney who will be executing the deed has authority under the authorising deed to do so.

Importantly, an attorney may only execute a deed (rather than an agreement) on behalf of another person (individual or company) if that attorney has been appointed by deed (rather than by a verbal or written agreement or other acknowledgement) to do so – see MYT Engineering Pty Ltd v Mulcon Pty Ltd (1999) 195 CLR 636. The usual way to do this is by the principal granting a power of attorney in the form of a deed.

It follows that a board resolution appointing an officer to execute a deed on behalf of the company would not, of itself, be sufficient to confer authority on the officer and to validate any deed later executed by the officer – see Torrens Redevelopment & Research Pty Ltd v Oakworth Developments Pty Ltd [2008] NSWSC 1096.

There is an exception to this requirement under Queensland law (see the Property Law Act 1974 (Qld)), which provides that an agent of a signatory (for example, an attorney) need not be appointed under a deed. However, this only applies to deeds governed by Queensland law. 

Attorney signs their own name

This execution block provides for the attorney to sign their own name. An attorney can sign in their own name if either:

  • the power of attorney expressly permits them to do so; and / or
  • the power of attorney is governed by the law of a jurisdiction which has a statutory provision allowing the attorney to sign in their own name (currently NSW, NT (unless a contrary intention appears in the power of attorney), Qld, Tas, Vic and WA).

Outside these circumstances, the attorney may not be able to sign in their own name and specialist advice should be sought.

Statutory assumptions of due execution where attorney signs for company

Where a company executes a deed by an attorney, the important presumptions of due execution under ss 128-129 of the Corporations Act 2001 (Cth) are not available in relation to the deed itself as the execution is not in accordance with ss 127(1) or 127(2). However, those presumptions will be available in relation to the execution of the underlying power of attorney if it has been executed under s 127.

Sections 127-129 of the Corporations Act are discussed in further detail in the Execution block for Company section of this app.

Registration of powers of attorney

There is a statutory requirement in most jurisdictions that any power of attorney authorising dealings with land must be registered to give validity to those dealings. The only exceptions to this general rule are:

  • Western Australia, where registration of a power of attorney is not required (although a power of attorney may be deposited with the Land Information Authority); 
  • Victoria, (where no power of attorney is required to be registered although a certified copy of the power of attorney must be lodged with the Land Titles Office);
  • Tasmania, where all powers of attorney are required to be registered; and
  • the ACT, where there are additional registration requirements for powers of attorney that are created in respect of conveyances or deeds.

The registration requirements in the various jurisdictions (including the precise circumstances in which registration is required) fall outside of the scope of this document. If registration of the power of attorney may be required, specialist advice should be sought. This execution clause may not be appropriate where registration is required.

As a general rule, if an instrument is executed under an invalid power of attorney or a power of attorney that post-dates the signed instrument, registering the power of attorney will not validate the instrument.

The signature must be witnessed

This execution block provides for the individual who is executing the deed as an attorney to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria or Queensland, it is recommended that the requirement not be removed for Victoria or Queensland as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed. Ideally a witness should not be a representative, relative or employee of a party to the deed.

There are specific compliance requirements for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Witnessing the signing of a deed may be conduct using real time audio visual technology such as Zoom or FaceTime where the governing law of the deed is New South Wales, Victoria, or Queensland law. There are strict procedural and drafting requirements if witnessing will be conducted using such technologies. Consider obtaining specialist advice if a witness and signatory propose to have the signatory’s signature remotely witnessed.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for an individual partner to execute a deed on behalf of a general partnership. It should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Partner executing on behalf of partnership must be appointed by deed

You should review the authorising deed to ensure that it has been validly executed and that the partner who will be executing the deed has authority under the authorising deed to do so.

Importantly, a partner may only execute a deed (rather than an agreement) on behalf of a general partnership if that partner has been appointed by deed (rather than by a verbal or written agreement or other acknowledgement) to do so.

The existence of a partnership deed is not sufficient unless that deed expressly provides that an individual partner has the power to execute a deed so as to bind the partnership.

If the partnership deed does not provide for one partner to execute a deed to bind the partnership, then a power of attorney to that effect which is executed as a deed will be a sufficient authorising document. However, that power of attorney must itself be validly executed as a deed by the partnership.

There are narrow exceptions where the above criteria are not satisfied by which a partnership can sign a deed. They are:

  • in the absence of a deed authorising one partner to execute a deed on behalf of the partnership, all of the partners must execute the deed for it to be valid; and
  • the general law also allows one partner to sign the deed if done so in the presence of all of the other partners.

This execution block is not appropriate for those situations which are outside the scope of this app.

The signature must be witnessed

This execution block provides for the individual partner who is executing the deed on behalf of the partnership to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria or Queensland, it is recommended that the requirement not be removed for Victoria or Queensland as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed. Ideally a witness should not be a representative, relative or employee of a party to the deed.

There are specific compliance requirements for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Witnessing the signing of a deed may be conduct using real time audio visual technology such as Zoom or FaceTime where the governing law of the deed is New South Wales, Victoria, or Queensland law. There are strict procedural and drafting requirements if witnessing will be conducted using such technologies. Consider obtaining specialist advice if a witness and signatory propose to have the signatory’s signature remotely witnessed. 

Disclaimer

This execution block and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides several alternative execution blocks for a company to execute a deed by a company by fixing its common seal, as witnessed by:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary or if there is no company secretary, (in the case of a proprietary company).

The execution blocks should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories

This execution block provides for execution pursuant to ss 127(2)(a), 127(2)(b) and 127(3) of the Corporations Act. Under those provisions, a company (whether a proprietary company or a public company) can execute a document as a deed, if the document is expressed to be executed as a deed the company’s common seal is fixed to the document and the fixing of the seal is witnessed by either:

  • two directors; or
  • a director and a company secretary

The requirements of ss 127(2)(a), 127(2)(b) and 127(3) will not be satisfied if only one person witnesses the fixing of the company’s seal, even if that person is both a director and company secretary. Further, those provisions do not permit two company secretaries to witness the fixing of the company’s seal if neither is a director – at least one witness must be, or must also be, a director.

Importantly, a company can execute a deed in accordance with ss 127(2)(a), 127(2)(b) and 127(3) of the Corporations Act even if its constitution only provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.

Further, if a deed merely appears to have been executed in accordance with those provisions, a counterparty to the deed may make an assumption that the deed has been duly executed under ss 128 and 129(6) of the Corporations Act (provided the counterparty does not know or suspect the assumption is incorrect under s 128(4)). In practice, because of the significant benefit this assumption provides to a counterparty (avoiding the need to have to prove authority as a threshold matter in the event of a dispute arising between the parties), counterparties will typically insist on execution pursuant to ss 127(2) and 127(3), or otherwise by way of signature in the manner contemplated by s 127(1).

Execution pursuant to the Corporations Act 2001 (Cth) – one signatory

This execution block provides for execution pursuant to ss 127(2)(c) and 127(3) of the Corporations Act. According to those provisions, a proprietary company (but not a public company) can execute a document as a deed if the document is expressed to be executed as a deed, the company’s common seal is fixed to the document and the fixing of the seal is witnessed by the sole director and (if there is one) secretary of the company. This method of execution can only be used by proprietary companies because public companies must have a minimum of three directors under s 201A(2) of the Corporations Act.

As noted in the Execution of Deeds section in relation to witnessing by two directors or a director and company secretary, it remains best practice to expressly state in the execution clause that a document is being executed as a deed to avoid any doubt as to the validity of the execution.

Execution can take place under ss 127(2)(c) and 127(3) even if a company’s constitution provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur. The same presumption of regular execution referred to in the Execution of Deeds section in the context of witnessing of the fixing of a company’s common seal by two directors or a director and company secretary also applies in the case of witnessing by a sole director and company secretary (or by a sole director if there is no company secretary) of a proprietary company.

Ensure the correct people witness the fixing of the seal

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Use these executions block only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). They should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery

As with other forms of execution of a deed, where a deed purports to have been executed under ss 127(2) and 127(3) of the Corporations Act, it will only take effect from the time it is delivered rather than when it is dated or executed.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides several alternate execution block for a company to execute a deed without affixing its common seal if the deed is signed by:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary or if there is no company secretary the sole director alone (in the case of a proprietary company).

The execution blocks should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories

This execution block provides for execution pursuant to ss 127(1)(a), 127(1)(b) and 127(3) of the Corporations Act. According to those provisions, a company can execute a document as a deed without using a common seal if the document is expressed to be executed as a deed and it is signed by:

  • two directors of the company; or
  • one director and one company secretary.

The requirements of ss 127(1)(a), 127(1)(b) and 127(3) will not be satisfied if only one person signs a deed on behalf of a company, even if that person is both a director and company secretary. Further, those provisions do not permit two company secretaries to sign a deed on behalf of a company – rather, at least one signatory must be, or must also be, a director.

A company can execute a deed in accordance with ss 127(1)(a), 127(1)(b) and 127(3) of the Corporations Act even if its constitution only provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur.

Further, if a deed merely appears to have been executed by signature in accordance with ss 127(1)(a), 127(1)(b) and 127(3), a counterparty to the deed may make an assumption that the deed has been duly executed under ss 128 and 129(6) of the Corporations Act (provided the counterparty does not know or suspect the assumption is incorrect under s 128(4)).  In practice, the availability of this statutory presumption usually causes a counterparty to insist on execution by a company under s 127 of the Corporations Act.

Execution pursuant to the Corporations Act – one signatory

This execution block provides for execution pursuant to ss 127(1)(c) and 127(3) of the Corporations Act. Under those provisions, a proprietary company (but not a public company) can execute a document as a deed if the document is expressed to be executed as a deed and is signed by the company’s sole director.

Again, it remains best practice to expressly state in the execution clause that a document is being executed as a deed to ensure compliance with section 127(3).

The requirements of ss 127(1)(c) and 127(3) will be satisfied if the sole director of a proprietary company executes a deed in circumstances where the company has not appointed any company secretary. Execution can take place under ss 127(1)(c) and 127(3) even if a company’s constitution provides for execution by an alternative method or is otherwise silent altogether as to the manner in which execution can occur. Again, where a deed merely appears to have been signed by a sole director and company secretary of a proprietary company, there will be a presumption of due execution under ss 128 and 129(6) of the Corporations Act.

Ensure the correct people sign the deed

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the deed.

Use these execution blocks only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Delivery

As with other forms of execution of a deed, where a deed purports to have been executed under ss 127(1) and 127(3) of the Corporations Act, it will only take effect from the time it is delivered rather than when it is dated or executed.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for a deed to be executed by a company without using a common seal by the signature of its authorised signatory. 

This is an execution block for a company to execute an agreement without using a common seal by the signature of its authorised signatory. The execution block should be used in conjunction with the important notes which follow below.

Execution pursuant to the Corporations Act 2001 (Cth)

This execution block provides for execution pursuant to s 126 of the Corporations Act. That section provides that a company can execute a document a deed without using a common seal if the power to do so is exercised by an individual acting with the company’s express or implied authority and on behalf of the company.

Section 126 of the Corporations Act may be employed to permit an authorised signatory to execute a deed for a company as agent, without a power of attorney in the form of a deed having been formally used to appoint the person. This section permits the execution of deeds on behalf of a company by mere authorised signatories, who can sign as the company’s agent with the company’s express or implied authority.

The counterparty to the deed might require proof that the individual is acting with the company’s authority. However, the statutory presumptions as to proper execution of an agreement by a person with authority (contained in s 129 of the Corporations Act) will apply in relation to execution under s 126. In practice, a counterparty may still prefer that execution takes place under s 127 rather than s 126.
Seek specialist advice in situations where the authorised signatory’s power is or may be implied.

Top

The G+T Execution App provides an execution block for an individual to execute a deed as a trustee. It should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts.  Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that they have power to execute the document.

If the trustee is not being required to give warranties about their authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after inserting the name of the trust.

The signature must be witnessed

This execution block provides for the individual who is executing the deed as trustee to have their signature witnessed. The witness must be present when the deed is executed.

The execution block has been drafted so that it complies with the laws relating to execution of deeds by an individual in all states and territories in Australia. While witnessing is not strictly necessary under the laws of Victoria or Queensland, it is recommended that the requirement not be removed for Victoria or Queensland as witnessing serves an evidentiary as well as a legal purpose. Witnessing is necessary in all other states and territories.

Where a person is required to witness signatures on a deed, the witness must not be a party to the deed. They should also not be a beneficiary of a trust executing the deed. Ideally a witness should not be a representative, relative or employee of a party to the deed.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Witnessing the signing of a deed may be conduct using real time audio visual technology such as Zoom or FaceTime where the governing law of the deed is New South Wales, Victoria, or Queensland law. There are strict procedural and drafting requirements if witnessing will be conducted using such technologies. Consider obtaining specialist advice if a witness and signatory propose to have the signatory’s signature remotely witnessed.

Disclaimer

This execution block and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an alternative execution blocks for a company to execute a deed as a trustee using its common seal in the presence of either:

  • two directors or one director and one company secretary; or
  • a sole director, who is also the company secretary or if there is no company secretary, (in the case of a proprietary company).

The execution blocks should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts. Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act 2001 (Cth).

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories or one signatory

The same considerations apply here as those raised earlier in the Execution of Deeds section of this app in the context of execution by a company in its own (non-trustee) capacity by fixing its common seal, witnessed by two signatories or the sole director of a proprietary company.  Reference should be made to that commentary if you are seeking to rely on ss 127(2) and 127(3) to allow execution of a deed by a company in its trustee capacity by fixing its common seal.

Ensure the correct people witness the fixing of the seal

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Use this execution block only for an Australian corporation

This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an alternative execution blocks for a company to execute a deed as a trustee using its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary or if there is no company secretary, (in the case of a proprietary company).

The execution blocks should be used in conjunction with the important general notes regarding Execution of Deeds and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts. Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act 2001 (Cth).

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories or one signatory

The same considerations apply here as those raised earlier in the Execution of Deeds section of this app in the context of execution by a company in its own (non-trustee) capacity by the signature of two directors, a director and company secretary or a sole director of a proprietary company. Reference should be made to that commentary if you are seeking to rely on ss 127(1) and 127(3) to allow execution of a deed by a company in its trustee capacity by the signature of those persons.

Ensure the correct people sign the deed

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the deed.

Use these execution blocks only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). They should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of deeds by foreign corporations.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

Execution of agreements

The execution blocks in this section should only be used for executing agreements. The document used in conjunction with this execution block should be expressed throughout to be an agreement rather than a deed. For executing deeds instead, please refer to the Execution of Deeds section of this document.

Do not use this execution block outside Australia or where the laws of another country may apply

These execution blocks have been drafted for use within Australia only, and for agreements that are subject to Australian law. If the law of the agreement is that of another jurisdiction and / or the agreement is to be executed outside Australia, specialist advice should be sought.

Electronic signatures and electronic agreements

Refer to the Electronic Execution section regarding when electronic signatures can be used to execute agreements.

Do not pre-sign signature pages

Signature pages should not be ‘pre-signed’ and attached to an agreement. Instead, the whole agreement should be printed, the pages securely fastened and then the agreement executed.

The G+T Execution App provides an execution block for an individual to execute an agreement. It should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Witnessing is for evidentiary purposes

This execution block provides for the individual who is executing the agreement to have their signature witnessed. This requirement has been included for evidentiary purposes. It is not necessary as a matter of law.

The witness must be present when the agreement is signed. They should not be a party to the agreement. Ideally a witness should not be a representative, relative or employee of a party to the agreement.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for an individual to execute an agreement as an attorney. The execution block can be used for an individual executing an agreement as attorney for either an individual or a company. It should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Ensure the person signing the agreement is authorised to do so

You should review the authorising power of attorney to ensure that it has been validly executed and that the attorney who will be signing the agreement has authority under the authorising power of attorney to do so.

Attorney signs their own name

This execution block provides for the attorney to sign their own name. An attorney can sign in their own name if either:

  • the power of attorney expressly permits them to do so; and / or
  • the power of attorney is governed by the law of a jurisdiction which has a statutory provision allowing the attorney to sign in their own name (currently NSW, NT (unless a contrary intention appears in the power of attorney), Qld, Tas, Vic and WA).

Outside these circumstances, the attorney may not be able to sign in their own name and specialist advice should be sought.

Statutory assumptions of due execution where attorney signs for company

Where a company executes an agreement by an attorney, the important presumptions of due execution under ss 128-129 of the Corporations Act 2001 (Cth) are not available in relation to the agreement itself as the execution is not in accordance with ss 127(1) or 127(2).  However, they will be available in relation to the execution of the underlying power of attorney if it has been executed under s 127 (by the signature of two directors, a director and company secretary, or the sole director and company secretary of a proprietary company, the sole director of a proprietary company that has no company secretary, or otherwise by the affixing of the company’s common seal witnessed by those persons).

Sections 127-129 of the Corporations Act are discussed in further detail in the Execution block for Company section, as well as in the balance of this Execution of Agreements section.

Registration of powers of attorney

There is a statutory requirement in most jurisdictions that any power of attorney authorising dealings with land must be registered to give validity to those dealings. The only exceptions to this general rule are:

  • Western Australia, where registration of a power of attorney is not required (although a power of attorney may be deposited with the Land Information Authority);
  • Victoria, where no power of attorney is required to be registered although a certified copy of the power of attorney must be lodged with the Land Titles Office;
  • Tasmania, where all powers of attorney are required to be registered; and
  • the ACT, where there are additional registration requirements for powers of attorney that are created in respect of conveyances or deeds.

The registration requirements in the various jurisdictions (including the precise circumstances in which registration is required) fall outside of the scope of this document. If registration of the power of attorney may be required, specialist advice should be sought. This execution clause may not be appropriate where registration is required.

As a general rule, if an instrument is executed under an invalid power of attorney or a power of attorney that post-dates the signed instrument, registering the power of attorney will not validate the instrument.

Witnessing is for evidentiary purposes

This execution block provides for the attorney who is executing the agreement to have their signature witnessed. This requirement has been included for evidentiary purposes.  It is not necessary as a matter of law.

The witness must be present when the agreement is signed. They should not be a party to the agreement. Ideally a witness should not be a representative, relative or employee of a party to the agreement.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for an individual partner to execute an agreement on behalf of a general partnership. It should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Partner executing on behalf of partnership

Legislation in each Australian jurisdiction provides that a partner can bind the entire partnership by executing in the partnership’s name an instrument relating to the business of the partnership.

Ensure the person signing the agreement is authorised to do so

You should review the partnership agreement (if there is one) to ensure that there are no restrictions on the execution of agreements by partners on behalf of the partnership (e.g. providing that agreements over a certain monetary sum can only be signed by two or more partners).

Witnessing is for evidentiary purposes

This execution block provides for the partner who is executing the agreement to have their signature witnessed. This requirement has been included for evidentiary purposes. It is not necessary as a matter of law.

The witness must be present when the agreement is signed. They should not be a party to the agreement. Ideally a witness should not be a representative, relative or employee of a party to the agreement.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides alternative execution blocks for a company to execute an agreement using its common seal in the presence of either:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary or there is no company secretary (in the case of a proprietary company).

These execution blocks should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories

This execution block provides for execution pursuant to ss 127(2)(a) and 127(2)(b) of the Corporations Act. According to those provisions, a company can execute a document as an agreement (as distinct from a deed) if the company’s seal is fixed to the agreement and the fixing of the seal is witnessed by either:

  • two directors; or
  • a director and a company secretary.

The requirements of ss 127(2)(a) and 127(2)(b) will not be satisfied if only one person witnesses the fixing of the company’s seal, even if that person is both a director and company secretary. Further, those provisions do not permit two company secretaries to witness the fixing of the company’s common seal if neither is a director – rather, at least one witness must be, or must also be, a director.

Execution under ss 127(2)(a) and 127(2)(b) is possible irrespective of what is contained in a company’s constitution.

Significantly, if it merely appears that execution has taken place in compliance with those provisions, the presumptions of regular execution in ss 128 and 129(6) of the Corporations Act will apply (unless a counterparty knows or suspects the agreement was not properly executed). As noted in the Execution of Deeds section, these presumptions are of great value to a counterparty and in practice result in a counterparty insisting that an agreement is executed by a company under ss 127(2)(a) and 127(2)(b), or otherwise under s 127(1) by the signature of two directors, a director and company secretary or the sole director and company secretary of a proprietary company (discussed in this Execution of Agreements section).

Execution pursuant to the Corporations Act 2001 (Cth) – one signatory

This execution block provides for execution pursuant to s 127(2)(c) of the Corporations Act. That section permits a proprietary company (but not a public company) to execute a document as an agreement if the company’s seal is fixed to the document and the fixing of the seal is witnessed by the sole director of the company. This method of execution can only be used by proprietary companies because public companies must have a minimum of three directors under s 201A(2) of the Corporations Act.

Again, a proprietary company can execute an agreement in accordance with s 127(2)(c) even if that is not expressly permitted by its constitution and if it appears that manner of execution has been used, the statutory presumptions of regular execution under ss 128 and 129(6) referred to above will be invoked.

Ensure the correct people witness the fixing of the seal

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Use these execution blocks only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). They should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of agreements by foreign corporations.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides alternative execution blocks for a company to execute an agreement without using a common seal by the signature of either:

  • two directors or a director and a company secretary; or
  • a sole director, who is also the company secretary or if the company has no  company secretary, (in the case of a proprietary company).

These execution blocks should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories

This execution block provides for execution pursuant to ss 127(1)(a) and 127(1)(b) of the Corporations Act. That section provides that a company can execute a document as an agreement without using a common seal if the document is signed by either:

  • two directors; or
  • a director and a company secretary.

As with the execution of an agreement by witnessing the fixing of a company’s common seal (see the discussion in this Execution of Agreements section, Execution block for Company (with common seal), execution of an agreement by way of signature under ss 127(1)(a) and 127(1)(b):

  • requires the signature of two people (not a single person who is both a director and company secretary) and is not satisfied by the signature of two company secretaries;
  • can occur notwithstanding anything contained in a company’s constitution; and
  • invokes the statutory presumptions of regular execution in ss 128 and 129(6) of the Corporations Act when it appears the requirements have been complied with (absent a counterparty’s knowledge or suspicion to the contrary).

Execution pursuant to the Corporations Act 2001 (Cth) – one signatory

This execution block provides for execution pursuant to s 127(1)(c) of the Corporations Act. According to that section, a proprietary company (but not a public company) can execute a document as an agreement without using a common seal if the document is signed by the sole director of the company. A public company cannot rely on s 127(1)(c) because it must have a minimum of three directors under s 201A(2).

As is the case in relation to execution under s 127(2)(c) by witnessing the affixation of a company’s common seal, execution by way of signature under s 127(1)(c):

  • requires a person to be specifically appointed as both a director and company secretary of a proprietary company, unless there is no company secretary;
  • applies notwithstanding anything contained in a company’s constitution; and
  • invokes the presumptions of regular execution in ss 128 and 129(6) of the Corporations Act, provided a counterparty does not know or suspect anything to the contrary.

Ensure the correct people sign the agreement

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the agreement.

Use this execution block only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of agreements by foreign corporations.

Disclaimer

This execution block and accompanying explanatory notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for a company to execute an agreement without using a common seal by the signature of its authorised signatory. The execution block should be used in conjunction with the important notes which follow below.

Execution pursuant to the Corporations Act 2001 (Cth)

This execution block provides for execution pursuant to s 126 of the Corporations Act. That section provides that a company can execute a document as an agreement without using a common seal if the power to do so is exercised by an individual acting with the company’s express or implied authority and on behalf of the company.

Section 126 of the Corporations Act may be employed to permit an authorised signatory to execute an agreement for a company as agent, without a power of attorney in the form of a deed having been formally used to appoint the person. This section permits the execution of agreements on behalf of a company by mere authorised signatories, who can sign as the company’s agent with the company’s express or implied authority.

The counterparty to the agreement might require proof that the individual is acting with the company’s authority. However, the statutory presumptions as to proper execution of an agreement by a person with authority (contained in s 129 of the Corporations Act) will apply in relation to execution under s 126. In practice, a counterparty may still prefer that execution takes place under s 127 rather than s 126.
Seek specialist advice in situations where the authorised signatory’s power is or may be implied.

Use these execution blocks only for an Australian corporation

This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of agreements by foreign corporations.

Witnessing is for evidentiary purposes

These execution blocks provides for the authorised signatory who is executing the agreement to have their signature witnessed. This requirement has been included for evidentiary purposes.  It is not necessary as a matter of law.

The witness must be present when the agreement is signed. They should not be a party to the agreement. Ideally a witness should not be a representative or employee of a party to the agreement.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Disclaimer

This execution block and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides an execution block for an individual to execute an agreement as a trustee. It should be used in conjunction with the important general notes regarding the Execution of Agreements and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts. Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that they have power to execute the document.

If the trustee is not being required to give warranties about their authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after inserting the name of the trust.

Witnessing is for evidentiary purposes

This execution block provides for the individual who is executing the agreement as trustee to have their signature witnessed. This requirement has been included for evidentiary purposes. It is not necessary as a matter of law.

The witness must be present when the agreement is signed. They should not be a party to the agreement. They should also not be a beneficiary of the trust. Ideally a witness should not be a representative, relative or employee of a party to the agreement.

There are specific requirements that must be complied with for a person to act as a witness for a real property transaction. Consider obtaining specialist advice in these circumstances.

Disclaimer

This execution block and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides alternative execution blocks that should be used in conjunction with the important general notes regarding Execution of Agreements and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts. Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act 2001 (Cth).

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories or one signatory

The same considerations apply here as those raised earlier in the Execution of Agreements section of this app in relation to execution by a company in its own (non-trustee) capacity by fixing its common seal, witnessed by two signatories or the sole director and (if it has one) secretary of a proprietary company. Reference should be made to that commentary if you are seeking to rely on s 127(2) of the Corporations Act to allow an agreement to be executed by a company in its trustee capacity by fixing its common seal.

Ensure the correct people witness the fixing of the seal

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are witnessing the fixing of the seal.

Use these execution blocks only for an Australian corporation

These execution blocks should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). They should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of agreements by foreign corporations.

Disclaimer

These execution blocks and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top

The G+T Execution App provides execution block that should be used in conjunction with the important general notes regarding the Execution of Agreements and specific information which follows below.

Execution by trustees

Consider obtaining a certified up-to-date copy of the trust deed. There is no ‘indoor management rule’ which external persons can rely on when dealing with trusts. Anyone dealing with a purported trustee will need to ensure that the trust is properly constituted, the trustee has been properly appointed and that it has power to execute the document.

If the trustee is not being required to give warranties about its authority then consider amending the execution block by adding the words ‘and in accordance with the trust deed dated [#]’ after the reference to the Corporations Act 2001 (Cth).

Execution pursuant to the Corporations Act 2001 (Cth) – two signatories two signatories or one signatory

The same considerations apply here as those raised earlier in the Execution of Agreements section in the context of execution by a company in its own (non-trustee) capacity by the signature of two directors, a director and company secretary or the sole director of a proprietary company. Reference should be made to that commentary if you are seeking to rely on s 127(1) of the Corporations Act to allow execution of an agreement by a company in its trustee capacity by the signature of those persons.

Ensure the correct people sign the agreement

Consider whether it is necessary or appropriate to undertake an ASIC search to establish the capacity of the people who are signing the agreement.

Use this execution block only for an Australian corporation

This execution block should only be used for Australian corporations which are registered under Chapter 2A of the Corporations Act 2001 (Cth). It should not be used for a foreign corporation (including a foreign corporation registered under Division 2 of Part 5B.2 of the Corporations Act 2001 (Cth)).

Specialist advice should be sought in relation to the execution of agreements by foreign corporations.

Refer to the Electronic Execution section regarding when electronic signatures can be used to execute agreements.

Disclaimer

This execution block and accompanying notes are general information and are not intended as advice on any particular matter. They have been created to assist in-house legal counsel with some key legal and practical requirements which commonly arise in the execution of deeds and agreements. The material assumes a certain level of legal understanding. It is not intended to provide an exhaustive guide nor is it a replacement for legal advice tailored to specific circumstances.

No user should act or fail to act on the basis of any of this material. Gilbert + Tobin expressly disclaims all and any liability to any persons whatsoever in respect of anything done in reliance, whether in whole or in part, on this material.

Top