This is a guide of the general requirements (under common law jurisdictions, but each jurisdiction may have its own specific requirements) for the execution of documents by an individual and a company (incorporated locally or overseas). Failure to properly execute and deliver documents may result in such documents being invalid or unenforceable and may affect the rights of parties to those documents.
Execution of documents by individuals are generally straight forward. It is more complex for companies depending on their place of incorporations. There will be a brief outline of deeds generally, since this is relevant to deeds executed by both individuals and companies.
STATUTORY DECLARATION, AFFIDAVIT AND AFFIRMATION - These documents are written statements. They are commonly used as part of the evidence collected by lawyers. There is very little difference between the two types of document, except for the method by which they were made.
DEEDS - Deeds are specialty documents which only take effect if formalities prescribed under the law are followed and by which an interest, right, or property passes or is confirmed or an obligation binding on a person is created or confirmed. Common law distinguishes between instruments which are deeds and those which are contracts merely signed under hand. By law, some written contracts must be entered into as deeds, otherwise they are invalid and unenforceable.
A deed may:
(i) effect the transference of an interest, right or property; or
(ii) create an obligation binding on some person or persons; or
(iii) confirm some act whereby an interest, right or property has already passed.
Apart from the contents, the basic requirements of a deed are that it must be in writing and be signed, sealed and delivered.
An escrow is a deed given to a third party, called an escrow agent, to hold and then deliver to when specified conditions are met. As with delivery as a deed, delivery as an escrow may be by conduct or words. These must indicate that the party intends, expressly or impliedly, to be bound by the provisions of the intended deed not immediately but only in the case of and upon performance of some conditions then stated or ascertained. Generally speaking, an escrow takes effect as a deed once the relevant conditions are fulfilled. An escrow is not, however, revocable in the meantime. No formal words or writing are required to create an escrow and whether or not there has been delivery, which is absolute or in escrow, is a matter of intention of the parties to be inferred from all the circumstances. Escrow conditions must be “objective”, by which it is meant that they cannot be wholly in control of a party. If the conditions are never met the agreement should provide for the parties to be returned to their original positions and the transaction will simply lapse.
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