Blog article

Execution of documents refresher

Legally, the correct execution of documents is an important area. Incorrect execution can make a contract legally unenforceable. 

Often, people may think that they are executing documents correctly, only to find it has inadvertently been executed incorrectly. The following advice on correct execution applies to both co-ops established as a co-operative society, and those established as a company.  

Contract or deed? 

It’s important to be able to identify what it is you’re being asked to sign, a contract or a deed. This is because English law makes a distinction between deeds and simple contracts. Two important differences between a deed and a contract are: 

  • Deeds are generally enforceable despite a lack of consideration (money)
  • The statutory limitation periods (the time frame in which a legal claim for ‘breach of contract’, for example, could be brought) for actions bought under a contract are six years from the date signed. However, the limitation period for a deed is 12 years

A deed is required for certain types of transaction, including, but not limited, to: land transfers; leases; mortages and charge, and powers of attorney. 

However, you can choose to use a deed even where it is not mandatory, if it is prefered, for the reasons as set out above. Identifying if a document is a deed should be simple as it should state ‘on the face of it’ that it is a deed. For example, you would expect to see the following wording within a deed: 

  • “This deed is made on [date]” at the start of the document
  • “Signed as a deed by…” in the execution clause of the document
  • “This document is executed as a deed and is delivered and takes effect at the date written at the beginning of it” towards the end of the document (in the ‘testimonium’ clause)

If the document does not state that it is a deed then it is likely that it is a contract. However, if you are unsure then you should always seek further advice.  

Execution methods 

The table below indicates the execution requirements for different types of documents under legislation. The way in which your organisation is authorised to execute deeds will usually be set out in your constitution (your Rules or Articles of Association, as applicable) and this should always be checked first.   

Legal Structure Document Execution Method Options
Co-operative Society and Community Benefit Society

Deed

 

 

Contract

• By affixing its common seal
• Signed by any two members of       the society’s committee
• Signed by one member of the
  committee and the secretary

• By affixing its common seal
• Signed by an individual, on behalf of       the society, acting with express or   implied authority

Limited Company (by guarantee or shares)

Deed

 

 

 


Contract

• By affixing its common seal
• Signed on behalf of the company by
  person with express or implied
  authority
• Signed by two Board Members or one
  Board Member and the Secretary
• Signed by one Board Member and
  witnessed 

• By affixing its common seal and signed
  by two Board Members or one Board
  Member and the Secretary
• Signed by two Board Member or one
  Board Member and the Secretary
• Signed by one Board Member and
  witnessed

We have worked with our lawyers Anthony Collins Solicitors to produce this blog to keep our members up to date with the latest legal developments to affect co-operatives. If you have any questions about this content, please contact the Advice Team at [email protected]

Written by Anthony Collins Solicitors
Updated: 03/07/2019