Failing to properly execute a document may mean that it cannot be legally enforceable, as it can be argued that it indicates that the parties did not intend to be legally bound. The ramifications of a defect in the execution of a document depends on the nature of the document in question – for example, whether the document is an agreement or a deed.

The major difference between an agreement and a deed is that no consideration is required for a deed to be binding. A deed has much more stringent requirements that must be complied with in order for it to be binding.

Defective Execution of a Contract or Agreement

A defect in the execution of a contract or agreement is not necessarily fatal to the agreement. Failure to execute a document may still mean that a legally binding agreement is created as there is a rebuttable presumption in commercial agreements that the parties intend to create legally binding relationship if the parties begin to perform the obligations under the agreement, but have not signed it.

If there is evidence that the parties signed the contract, but have not complied with the requirements contained in section 127 of the Corporations Act 2001 (Cth) (the Act) this may be sufficient to establish that the parties had an intention to be legally bound by the agreement. If there is an intention to be legally bound by the agreement, then it can be enforceable.

Defective Execution of a Deed

In contrast with a contract or an agreement, a deed has much more rigid execution requirements. Failing to duly execute a deed means that the deed will be unenforceable. The reason underlying the more stringent requirements for the execution of a deed stems from the fact that a deed is a promise that is not supported by consideration, unlike an agreement. Therefore, the intention for the parties to be bound by the deed cannot be inferred.

Failing to Affix the Common Seal

A company can execute documents by affixing the company common seal. If a document is held out to be executed with the common seal of a company, but the common seal is not affixed, the document will still be valid if the requirements for signing under section 127 of the Act are complied with.

Defective Execution under Section 127 of the Act

If a company does not comply with the requirements set out in section 127 of the Act regarding execution of documents, the document will not be duly executed and no legally binding agreement is created. No remedial provision exists in the Act.

However, a legally binding document may still be created if the company executes a document in accordance with the company constitution.


It is crucial that companies execute documents either in accordance with the requirements set out in section 127 of the Act or as the company constitution requires. Failure to properly execute a document can, at worst, mean that the document is not enforceable. The best-case scenario is that the document may still be enforceable but there may be delays and disputes as to what was agreed upon.


About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Lachlan McKnight

Get a Free Quote Now

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • We will be in touch shortly with a quote. By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.

Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy