What is the Difference Between Deed and Agreement?
🆚 Go to Comparative Table 🆚The main difference between a deed and an agreement lies in the requirements for their formation and their legal consequences. Here are the key differences between the two:
- Formation: An agreement, also known as a contract, is an understanding or arrangement between two or more parties, usually in written or oral form. A deed, on the other hand, is a special type of binding promise or commitment to do something, and it is legally-sound in court. Deeds do not require consideration to be binding, while agreements do.
- Signing Requirements: A deed mandates additional restrictions pertaining to execution/signature to qualify as legitimate, and it must include more than one signature and witness. Agreements can be in written or oral form, and their signing requirements may vary depending on the jurisdiction and the nature of the agreement.
- Legal Consequences: A deed is a legal tool containing all obligations and rights of parties entering into an agreement, and it is legally-sound in court. Agreements are usually in written or oral form, and their legal consequences depend on whether they meet the requirements of a valid contract, such as offer, acceptance, intention to be legally bound, and consideration.
- Binding Nature: A deed is binding on a party sealed and delivered to the other parties, even if the other parties have not yet executed the deed document. In contrast, an agreement is binding only when it meets the requirements of a valid contract, which include offer, acceptance, intention to be legally bound, and consideration.
In summary, a deed is a special form of legal document that indicates a party's promise to do something and does not require consideration to be binding, while an agreement is an understanding or arrangement between parties that requires consideration to be binding. It is essential to use the correct document for your arrangement, as they have different signing requirements and legal consequences.
Comparative Table: Deed vs Agreement
The main difference between a deed and an agreement lies in the requirement of consideration. A deed does not require consideration to be binding, while an agreement does. Here is a table summarizing the differences between a deed and an agreement:
| Feature | Deed | Agreement |
|---|---|---|
| Definition | A deed is a special type of binding promise or commitment to do something. | An agreement, also known as a contract, is an understanding or arrangement between two or more parties. |
| Consideration | Deeds do not require consideration to be binding. | Agreements require consideration to be binding. |
| Enforceability | Deeds are binding on a party sealed and delivered, even if the other parties have not yet signed the deed. | Agreements are enforceable even if they are made orally. |
| Execution | Deeds must be in writing and follow specific formalities, such as being signed, sealed, and delivered. | Agreements can be in writing or oral, but it is preferable to have them in writing. |
| Types | Some common types of deeds include deeds of termination, deed poll, deed of indemnity, deed of forbearance, deed of settlement, deed of confidentiality, and deed of guarantee. | Agreements can cover a wide range of topics and can take various forms, such as contracts, memorandums of understanding, or letters of intent. |
When deciding whether to use a deed or an agreement, consider factors such as the requirement of consideration, the period of time in which a claim can be brought, and the specific needs of your arrangement.
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