Summary
- A deed poll is a legal document where one party makes a binding promise or declaration without needing agreement or consideration from another party.
- It is commonly used for name changes or unilateral commitments, such as guarantees or intellectual property assignments.
- To be enforceable, it must be in writing, clearly state it is a deed, and be properly signed and delivered.
- This guide explains deed polls for business owners in Australia, outlining their purpose and legal requirements, prepared by LegalVision, a commercial law firm that specialises in advising clients on commercial contracts.
- It provides a practical explanation of when to use a deed poll and how to ensure it is legally valid.
Tips for Businesses
Use a deed poll when making a one-sided commitment without exchange of value. Clearly state obligations, ensure proper execution as a deed, and follow witnessing requirements. Check whether a contract is more suitable if obligations are mutual, and seek legal advice to avoid enforceability issues.
A deed poll is a formal legal document through which one party makes a binding promise or declaration without requiring agreement from another party. It is commonly used where a single party undertakes an obligation, such as changing their name or committing to specific obligations in a commercial context. This article explains what a deed poll is and how it operates in practice.
What is a Deed?
A deed records a legally binding agreement, promise or commitment to do something. They have significant benefits where it is unclear whether a party is providing consideration or exchanging value for the promise or commitment.
You can use a deed to:
- transfer an interest or right in property, such as intellectual property, between business entities or in the sale of a house;
- enter into a non-disclosure deed to protect confidential information;
- document a settlement reached with another party following a dispute;
- provide a bank guarantee or letter of credit; or
- create a legally binding obligation on a person or entity.
Difference Between a Deed and an Agreement
Aside from particular requirements concerning documentation and layout, the main difference between agreements and deeds is the requirement for consideration. For an agreement to be binding and enforceable, there needs to be an exchange of value in consideration for the promise.
A deed does not require consideration to be enforceable or legally binding. The law views deeds as the strongest indication that the parties intend to be bound.
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Types of Deeds
Depending on your industry, you may encounter specific types of deeds regularly. The most common ones include:
- deed of termination;
- escrow deed;
- financial guarantee or letter of credit;
- deed poll;
- indemnity deed; and
- confidentiality deed.
What is a Deed Poll?
Unlike other deeds, a deed poll requires only one party to enter it. A deed poll binds the executing party to an intention, commitment or promise they make in favour of an individual or a particular entity. The most common deed poll types are used to legally change your name.
Likewise, in the commercial space, building contractors enter deed polls in favour of the property owner, promising to comply with certain conditions such as those specified in the lease.
Requirements of a Deed
You must meet specific requirements when drafting and executing a deed.
Firstly, you must express the document as a deed. If you enter the deed personally, you must have someone witness your signature. Companies can execute the deed in accordance with the Corporations Act. This means that the following people can execute a deed on behalf of a company:
- two directors;
- a director and the company secretary; or
- authorised representative.
A company can also execute a deed by way of power of attorney.
Under a deed poll, there is no need for another party to sign it. This means the deed poll will be binding once the relevant party executes it. Different states also have specific laws covering the requirements to execute a deed so that it is legally enforceable. The deed should specify the relevant state that governs the deed.
Likewise, deeds must be “signed, sealed, delivered,” setting them apart from agreements. Traditionally, deeds were previously necessary to be signed, then sealed and delivered to the other party for them to be legally binding.
Limitation Periods for Deeds
Agreements and deeds have different limitation periods, which is another reason why entering into a deed might be preferential.
A limitation period is the period of time that you can bring a claim to court after an event occurs, such as a breach of an agreement or deed. Limitation periods protect defendants from unfair claims that can be difficult to verify after an extended time has elapsed.
Each state has legislation governing the limitation period for deeds executed under it. For agreements, a breach claim must be filed within six years of the breach occurring.
However, for deeds, the limitation periods are:
- New South Wales: 12 years;
- Queensland: 12 years;
- Australian Capital Territory: 12 years;
- The Northern Territory: 12 years;
- South Australia: 15 years;
- Victoria: 15 years;
- Tasmania: 12 years; and
- Western Australia: 12 years.
Navigating the Deed Poll Process: Practical Advice
When navigating the deed poll process, it is crucial to approach it with careful consideration and a clear understanding of its purpose. A deed poll is a versatile legal instrument used for unilateral declarations or promises, with name changes being a common but not exclusive use. Before drafting, take time to clarify your intentions and research the specific legal requirements that apply in your jurisdiction, as these can vary across Australian states and territories.
When crafting your deed poll, the key rules of contractual drafting apply. Among others, precision is key. Use clear, unambiguous language to express your intention and your specific promise or declaration. For instance, if you are a contractor using a deed poll to commit to certain building standards, clearly outline them and your commitment to adhere to them. Equally, if you are using a deed poll for a name change, explicitly state your current full name, your new full name, and your intention to abandon your former name and assume your new name for all purposes.
Key Takeaways
Execution and storage of your deed poll are critical steps. Sign the document in the presence of a qualified witness, typically a person at least 18 years of age who is not a party to the deal or instrument and was present at the signing. Make several certified copies, as you may need to provide these to various parties.
For example, changing your name might require copies for your bank, employer, and government agencies like Medicare or Centrelink. Store the original in a secure location, as you may need it to prove your declaration in the future. Remember, a deed poll is legally binding, so be prepared to follow through on your commitments. Depending on the nature of your deed poll, you may need to register it with relevant authorities or take additional steps due to your declaration.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced contract lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.
Frequently Asked Questions
A deed is a document that meets certain formal requirements and that records a legally binding promise or commitment to do something.
A deed poll requires only one party to enter it. They bind the party of the deed to an intention, commitment or promise they make in favour of an individual or a particular entity.
A deed poll differs from a contract because it does not require consideration or mutual agreement. It binds only one party, whereas a contract typically requires at least two parties exchanging value.
You should use a deed poll when your business needs to make a one-sided commitment, such as a guarantee or confidentiality obligation, without receiving anything in return.
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