Lloyd's Maritime and Commercial Law Quarterly
BREAKING THE SEAL: THE NEW LAW ON DEEDS
Graham Virgo*
Charles Harpum*
1. Introduction
Two recent statutory provisions—the Law of Property (Miscellaneous Provisions) Act 1989, s. 1, and the Companies Act 1989, s. 130(2)1—have significantly changed the law of deeds. This article examines critically the legal background to these sections and explores their interaction and ambit.
In Goddard’s Case, in 1584,2 the court, summarizing law that was already ancient, said that “there are but three things of essence and substance of a deed, that is to say, writing in paper or parchment, sealing and delivery …”. Although the nature of delivery was redefined, that list of requirements remained the law for deeds executed by individuals until 1 January 1926 and for those made by corporations until 31 July 1990.3 What is important is the distinction—which continues to be drawn by the law—between the execution of a deed, and its delivery. A document is not a deed merely because it has been formally executed. Its maker must in addition have done some act “so as to evince an intention to be bound”.4 The function of delivery is to fix the date at which the deed takes effect.5 Delivery may be unconditional, in which case the deed is immediately binding, or it may be conditional on the happening of some event. Such a deed is called an escrow and becomes binding when the condition is fulfilled.
* Fellow of Downing College, Cambridge.
1. The Law of Property (Miscellaneous Provisions) Act 1989, s. 1, which was brought into force on 31 July 1990 by statutory instrument (S.l. 1990 No. 1175), is discussed by Ruth E. Annand (1989) 105 L.Q.R. 553, 553–555. There is also a good account of the Act, set in the context of recent developments in conveyancing law, by D. N. Clarke, “Delivery of a Deed: Recent Cases, New Statutes and Altered Practice” [1990] Conv. 85. The Companies Act 1989, s. 130(2), was brought into force on 31 July 1990 by statutory instrument (S.l. 1990 No. 1392).
2. (1584) 2 Co.Rep. 4b, 5a. See to like effect John Rastell, Termes of the Lawe (1579), folio 86.
3. See Norton on Deeds, 2nd edn. (1928), 3. The requirements for deeds executed by individuals are considered infra.
4. Vincent v. Premo Enterprises (Voucher Sales) Ltd. [1969] 2 Q.B. 609, 619, per Lord Denning, M.R. In its modern usage, “execution” commonly means only sealing and signature. It does not include delivery. This is how the expression is employed in a number of statutes: e.g., Law of Property Act 1925, s. 74(3); Companies Act 1989, s. 130(2); but cf. Law of Property (Miscellaneous Provisions) Act 1989, s. 1(3). Traditionally, “execution” included both sealing and delivery and it is sometimes still used in this way: Longman v. Viscount Chelsea [1989] 2 E.G.L.R. 242, 245, per Nourse, L.J. Ironically, in that case, the Court of Appeal were critical of Buckley, J., for a conclusion which he had reached in D’Silva v. Lister House Development Ltd. [1971] Ch. 17, on the assumption that “executed” in the context of the Law of Property Act 1925, s. 74(1), meant sealed and delivered: see [1989] 2 E.G.L.R. 242, 246.
5. “A deed takes effect only from this tradition or delivery; for, if the date be false or impossible, the delivery ascertains the time of it”: 2 Bl.Comm. 307. See too Hall v. Cazenove (1804) 4 East 477.
209