Reading time: 5 minutes

As a result of the COVID-19 pandemic, the Government has introduced several measures to address the difficulties faced by many businesses. One of those measures was an exception to the requirement that a person signs a deed with wet ink. For many businesses, the ability to sign a deed electronically was a welcome change that simplified this process. This is especially the case for parties that could not sign the deed in the same location. In addition, with 2021 bringing further lockdowns and restrictions on the movement of individuals, the Government reintroduced temporary legislation in August 2021. These additional changes enable companies to execute documents electronically, including deeds.

Complete Guide to Expanding Your Startup to Australia

After proving your startup’s success in your home country, you may be thinking about the next step for growth — expanding overseas.

This free guide aims to introduce startup founders to the Australian startup market.

Download Now

Difference Between an Agreement and Deed

The two main types of contracts are:

The primary difference between a deed and an agreement is that for an agreement to be legally enforceable, you must give the other party something of value in consideration for their promise. Typically, the value would be in the form of money. For example, Cate pays Carl $50 to clean her car. 

On the other hand, a deed only requires a promise or commitment to do something, and there is no requirement for consideration.

Common examples of deeds include:

  • bank guarantees;
  • intellectual property assignments for no value between related entities; and
  • deeds of settlement.

Formal Requirements When Signing a Deed

You must follow several formal requirements when executing a deed to ensure. These requirements ensure the deed is valid and enforceable (which differ from an agreement). These include that the deed must:

  • be in writing.
  • have a seal on the document. Nowadays, deeds tend to state that each party has “signed, sealed and delivered” the deed. As such, you do not need to physically place a seal on the document.
  • be delivered to the other party to the deed. The deed will be deemed effective from the date it is ‘delivered’. Typically there is no requirement to actually deliver the deed document from one party to another. As a general rule, a court will presume that a correctly executed deed has been ‘delivered’ unless circumstances show otherwise.

Additionally, there are circumstances where you need to have a witness view the signing of your deed. For example, suppose you are signing a deed for a personal matter (as opposed to as a company). Hence, in some Australian states, you must sign the deed in the presence of a witness. That witness needs to be an individual who is not a party to the deed. 

Further, for companies, either two directors or a director and a company’s secretary must sign the deed. There is no requirement for a separate witness to sign the deed when signed on behalf of a company.

Can Companies Sign a Deed Electronically?

Before the COVID-19 pandemic, another formal requirement in most states was that a party must sign a hard copy of the deed with wet ink. However, due to the Covid-19 pandemic, there have since been some temporary measures in place. 

Notably, under the Corporations Act, companies can now electronically sign deeds, provided that they meet several criteria. 

It is important to note that this is a temporary measure. Unless the Government grants an extension, this measure will expire on 31 March 2022. 

When electronically signing a deed with another business, for you to rely on the other party’s execution under the Corporations Act, you must be satisfied that:

  • a method is used to identify the person signing the document, and they indicate their intention to sign the document;
  • each copy or counterpart of the deed contains the entire document; and
  • the method used to sign the document is reliable and appropriate for the purpose for which the document was generated or communicated, in light of all the circumstances. You can achieve this by using a reliable document execution platform such as Docusign.

Additional Considerations

The amendments to the Corporations Act allow companies to execute deeds electronically. However, you should still make additional checks to ensure that you or your company can electronically sign the actual type of document. 

For example, in Queensland, you cannot electronically sign land titles transfer forms. This is the case, even where both parties to a transaction are a company. Likewise, in New South Wales, there are certain mortgage documents that you cannot sign electronically. 

Key Takeaways

At present, you can sign a deed electronically due to changes to the Corporations Act, so long as you meet particular criteria. However, once those laws expire, this may no longer be the case. Notably, different states and territories in Australia follow an inconsistent approach to the signing of documents. Hence, it is prudent to get legal advice before executing a deed electronically, so you can ensure its proper and valid execution.  

If you need help with executing deeds or any other form of contract, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is a deed?

A deed is a type of contract. Usually, a valid agreement requires one party to give another party something of value in consideration for their promise. Typically, the value would be in the form of money. However, a deed does not require the element of consideration. A deed only requires a promise or commitment to do something.

Can my company sign a deed electronically?

Under the Corporations Act, companies can now electronically sign deeds, provided that they meet several criteria. It is important to note that this is a temporary measure. Unless the Government grants an extension, this measure will expire on 31 March 2022. 


Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Lauren McKee
Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards