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Agreement or deed?

The decision on whether to use a deed or an agreement can make a significant difference to the success of a transaction or project.

An agreement (or contract) must meet the following pre-conditions to be valid and enforceable:

For a deed to be considered valid and enforceable, it must:

The main difference between an agreement and a deed is that there is no requirement for consideration to make a deed binding. This is because of the idea that a deed is intended, by the executing party, to be a solemn indication to others that they truly mean to do what they are planning to do or are doing.

A deed is considered to be binding on a party when they have signed, sealed and delivered the deed to the other parties, even if the other parties have not yet executed the deed document.

Each state in Australia has specific legislation regarding the period of time in which a claims or actions can be lodged following the breach of an agreement or deed.

A claim following a breach of an agreement must be submitted within 6 years of the breach occurring. The period is longer for those who make a claim following a breach of the terms of a deed.

Since the length of time usually depends on the law of each state, it is important to have a jurisdiction clause in your deed or agreement.

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